BT's head man Ben Verwaayen today announced his strict plans to reduce the telco's debt mountain.
BT head honcho cracks whip over debt
After its fairly substantial broadband price cuts earlier this year BT is planning to focus on consumer services, making 'customer satisfaction its priority and putting all its attention on the broadband market'.
However, although BT's broadband price cuts have increased the number of people connected to broadband services, it needs to create many more incentives if it wishes to meet its cost-cutting target of £175m in consumer retail and £200m in wholesale services.
"The broadband price cuts have been successful and we hope by launching new services and focusing on quality content more people will opt for broadband services," said a company spokesman. "In the long term obviously we hope they will make money."
To increase it broadband customer base, Verwaayen said BT would be making ADSL available to at least two-thirds of the population, over 16,000 households by the end of May.
"We are going to act as one company focused on our customers," said Verwaayen (pictured). "If we can get our customer satisfaction right, introduce new and innovative services, manage our costs and cash effectively and unite people we can deliver real value to our shareholders." But this is easier said than done.
Verwaayen said that BT must also improve customer communication facilities, making it easier for customers to contact the company, although the firm has not yet revealed how it will do so, most importantly, without increasing costs.
BT's debt-ridden business unit Ignite, which provides data transport and content hosting for businesses, will be up for the chop of it cannot break even by Spring next year, which will almost certainly create more job losses.
The European business arm racked up £93m of debt across Spain, Germany and the Netherlands last year alone.
BT Ignite will now focus on large corporate customers. Outside the UK no further investment will be made in services for medium-sized businesses.
A caveat: the report reads: "Although BT Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct." So we won't hold our breath just yet.