Union takes BT spin-off row to government

BT may have just announced plans to rebrand its mobile business as 'MMO2', but a union is still trying to stop the forthcoming demerger
Written by Graeme Wearden, Contributor

The Communications Workers Union (CWU) is taking its protests over the demerger of BT's wireless division to the government, and is insisting that the split will not benefit either BT's shareholders or its workforce.

According to union officials, a meeting between the CWU and Patricia Hewitt -- the secretary of state of the DTI -- will take place within the next two weeks, thanks to the intervention of chancellor of the exchequer Gordon Brown.

"We wrote to Gordon Brown with our concerns, and he replied saying he was very interested and asking us to meet with Patricia Hewitt," a CWU spokesman told ZDNet. The DTI was unable to give a precise date for this meeting, explaining that it is departmental policy never to confirm what meetings a secretary of state was planning to attend.

The CWU believes that jobs are likely to be lost if BT continues with its plans to spin off its mobile division, which the company has just announced will be renamed "MMO2". Reports last week suggested that the unions is prepared to bring its 80,000 BT members out on strike if the telco doesn't agree to reconsider plans. The CWU is insisting that industrial action would be a last resort, and that it is concentrating on persuading BT's investors that the demerger is a mistake.

"If the wireless division is separated from the rest of BT then it is highly likely to be merged or taken over, by someone such as Telefonica -- and that would certainly lead to job losses," claimed the CWU spokesman.

The CWU also believes that BT is wrong to lose its mobile operations, given that forthcoming 3G networks means that this area is likely to show considerable activity in the coming years. "Why sell off the only part of your business that it really going to grow?" the union spokesman pointed out.

"We're worried that this could lead to a loss of consumer confidence in the whole of BT -- it currently benefits from being a one-stop shop where customers can buy almost any telecom products they want. This could quickly change if someone else snaps up their mobile business".

BT has insisted, however, that the de-merger will go ahead. It said on Friday that the process was well advanced, and insisted that employees supported the spin-off -- a claim the CWU says it finds hard to believe.

There was speculation in Sunday's newspapers that Japanese mobile giant NTT DoCoMo might decide to buy MMO2. The company has been highly successful with its interactive i-mode services, and a company executive revealed on Monday that it was aiming to launch i-mode in Europe by early next year.

The BT Wireless group consists of the UK's Cellnet, VIAG Interkom in Germany, Telfort in the Netherlands, and Digifone in the Republic of Ireland, as well as BT's mobile phone internet portal Genie. These brands will be renamed as "O2", but not until after the demerger -- assuming it does ahead. The BT Wireless business is to be named "MMO2" straight away.

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