Bt's Future

B.T.'s Strategic Priorities

* Keep a relentless focus on improving customer satisfaction.

* Put broadband at the heart of B.T.

* Create mobility services and solutions.

* Transform our network for the 21st century.

* Achieve competitive advantage through cost leadership.

* Lead the world in network-centric ICT solutions.

* Re-invent our traditional business.

* Motivate our people and live the B.T. values.

B.T. Groups structural problems.

* Under attack about its treatment of competitors.

* B.T. is being forced to make major structural changes by Ofcom.

* Ofcom faced with difficult decision - must ensure fair trading but would like to encourage the kind of investment in new technology that B.T. can afford.

* Only total split of B.T. Wholesale from the B.T. Group will satisfy competitors who feel that B.T. Retail has the advantage.

* No incentive for B.T. Wholesale to split as currently B.T. Retail is a captive customer.

* Head of Retail, Pierre Danon, has demanded right to circumvent prices charged by B.T. Wholesale.

- This could offer Ofcom an alternative to enforced break-up of B.T. Group.

* Revenues from traditional calls being eroded by competitors and mobile calls.

* Recent interim results showed revenue from I.T. and broadband up 36% to Ј1.03 Billion.

* Head of Retail resigned due to board's refusal to allow him to follow his strategy for increasing