BT (NYSE: BT) dodged a bullet this past week when the UK government revealed it would not cut contracts with the incumbent carrier as it tries to tighten its purse strings.
Following talks with Cabinet Office Minister Francis Maude, BT said in a statement that its government contracts will "remain in place," adding that "talks focused on new arrangements designed to deliver efficiencies, many of them achieved by changes which will enable wider economies of scale while yielding genuine benefits to government."
The new agreement between BT and the UK government is part of a government-wide cost cutting effort that's focused on centralizing contracts.
BT isn't the only service provider that's been fretting about UK's public sector spending cuts. Cable & Wireless (LSE: CW.L) and Global Crossing UK (Nasdaq: GLBC) have also seen similar slowdowns. In July, C&W's stock took a 20 percent hit in July when it revealed it was seeing flat growth in the UK public sector, while Global Crossing decided to shift its attention to the UK's enterprise segment following the loss of a key contract with the UK Lottery.
- see the release
- Reuters has this article
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