No overwhelming case for mm02 spin-off, BT reveals

BT board plays percentages game over mm02.

BT chairman Sir Christopher Bland admitted to shareholders last week that the decision to demerge mm02 was based on a "70/30" balance of argument.

The revelation came in answer to a question from Jeannie Drake, deputy general secretary at the Communication Workers Union, who asked if the BT board would resign if the demerger failed to raise shareholder value significantly in both the main group and the wireless division.

Bland said he "most certainly would resign", but didn't offer concrete criteria for failure or a timeframe for resignation.

He then praised Drake, who has argued that keeping fixed and wireless together would best serve the interests of employees, and admitted that the argument for leaving mm02 to stand on its own feet was not emphatic.

"It's not a slam-dunk argument. There are valid arguments for keeping mm02, but our analysis showed a 70/30 balance in favour of the demerger," he said.

The CWU confirmed it would not ballot on strike action despite "disillusion" among staff. "Never have so few taken so much from so many," Drake told the EGM.

Bland told shareholders that the structural changes implemented since last summer had given BT the edge over its competitors.

"The restructuring and refinancing were very timely," he said. "There's no way we could raise even £6bn in current market conditions. Other operators won't have the flexibility that BT will."