BT's chairman steps down, successor named
THE CHAIRMAN OF British Telecommunications (BT), Sir Iain Vallance, is stepping down, the company announced Thursday. Sir Christopher Bland, currently chairman of British Broadcasting (BBC) has been named as his successor. "This will bring in a fresh brain and a fresh approach to the current situation facing BT," said BT spokesman Roger Westbury, referring to the financial troubles the company is struggling with. Although BT reported a net profit in February, the company is struggling with a large debt load, now amounting to around 43 billion. Vallance's resignation has nothing to do with BT's current debt situation though, said Westbury. "The two things are not connected," he said, adding that Vallance "has been chairman since 1987 and for some time now he has felt it would be right to step down and to [make way] for a suitable successor." However, not everyone is convinced that Vallence's resignation has nothing to do with BT's financial situation. "It had to happen. The City has wanted his head for months," said Paolo Pescatore, senior research analyst mobile communications at IDC The City is the popular name for the financial institutions situated in an area called the City of London; BT owes many of these institutions money. "BT has suffered a lack of strategy or direction, and it needs some fresh ideas," Pescatore said, adding that executives at the company have known that they were going to have to invest heavily in 3G (third-generation) networks for a long time, and they should have taken measures sooner. 3G is one of the reasons BT has such high debts. The license fee in the United Kingdom alone cost the company $5,797,590,697.18, and the company still faces the cost of building the network. BT is currently looking into various ways to reduce its debt. The company is trying to sell its yellow pages service Yell and its mobile division BT Wireless. Vallance will end his chairmanship on May 1, although he will remain as chairman emeritus. This means he will be available for support and advice to Bland and CEO Sir Peter Bonfield, according to Westbury.