The Esat group and British Telecom were embroiled in a public disagreement over branding strategy last night just hours after BT secured 100 per cent control of Esat Digifone.
At a briefing in Dublin senior BT executives announced plans to drop the Esat brand from many of its Irish operations within months as part of a global restructuring.
Esat Business and some consumer operations within the Esat Fusion brand would be renamed BT Ignite. However, the rebranding would not effect mobile operator Esat Digifone.
Mr Martin O'Conor, BT vice-president of group communications, said it was a logical move as most of the Ignite business was European. "For the consumer offering it's not 100 per cent confirmed yet," he said. "Maybe the Esat brand could exist for some consumer brands."
However, last night an official statement from Esat denied that any final decision had been taken on branding by BT and stressed the independence of local management.
"The Esat brand is an extremely strong and successful brand in the Irish market," said the statement. "The branding of local operations is a matter for the management of the local business.".
Later, Mr O'Connor contacted The Irish Times to retract his earlier statements and said a final decision on branding had not been made by BT.
Any decision to rebrand Esat just four months after the group initiated its own branding strategy at a cost of millions of pounds in advertising would be strongly resisted by local management.
However, BT's new branding strategy, which has been developed by Mr Simon Ingman, BT director of brand, is expected to be introduced within the next couple of months before a public flotation of its business.
The corporate rebranding is part of BT's ongoing restructuring which should see part of its wireless division and BT Ignite floated later this year.
BT hopes to raise $10 billion (€10.74 billion) before the end of this year to reduce debt of $30 billion caused in part by the high costs of third-generation mobile licences. A decision to rebrand Esat would not be unexpected, according to Mr Chris Cawley, managing director of Cawley Nea Advertising. "There will be more brand consolidation in the telecoms industry. Many companies are in a state of flux and hard commercial-nosed decisions are being taken."
BT confirmed yesterday that it would take full ownership of Esat Digifone following a decision by Telenor to sell an outstanding 49.5 per cent stake for $1.24 billion.
The deal is expected to be concluded by March and will mean BT holds controlling stakes in mobile operators in the UK, the Netherlands, Germany and the Republic.
Mr O'Connor said the costs associated with the purchase of Telenor's stake had already been factored into BT's debt.
Esat Digifone has already been demerged from the Esat Group of companies and is part of BT Wireless.
Esat Digifone chief executive, Mr Barry Maloney, said yesterday it was business as usual at Digifone. "Telenor has had no management role in the company for three years," he said. "We are now part of the flotation plans for wireless in the second half of the year."
