Telecom group BT has unveiled its biggest reorganisation since it was privatised in the 1980s.

The overhaul will include splitting its operations into separate divisions, with a view to listing them as separate companies on the stock market.

The first division to be spun off will be the group's Yellow Pages operation, which later this year will seek a separate listing under the name Yell. BT also plans to divide its UK phone business into two operations, for wholesale and retail services.

The wholesale operation will provide telecoms services to other phone operators, while the retail business will serve residential and business customers. The group said the move was subject to discussion with phone regulator Oftel.

The company said the move would allow regulators to focus on its wholesale business, leaving the retail operation to be "treated in the same way as other companies in the competitive market in which it operates".

While the Yellow Pages business will be the first to be spun off, BT said its overhaul would open the way for other operations to be split off with separate stock market listings.

BT chief executive Sir Peter Bonfield said the group had not decided which divisions could next be listed separately.

He said: "This is not a precursor to the wholesale break-up of BT. At this stage we not ruling anything in or out." He added BT had already talked to Oftel about the plans to divide the UK fixed-line phones business into wholesale and retail businesses and the regulator's initial reaction had been "favourable".

Sir Peter said the restructuring would not in itself lead to job losses and would cost BT in the region of £10 million to implement. He said the split would allow BT to be regulated in a way more suited to the rapidly changing telecoms market.

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