BT may write down £2bn - report

There is speculation that BT could write down almost £2bn (€3.2bn) on the value of its European businesses.

The group is thought to be preparing to announce a write-down on the fixed-line businesses of Viag in Germany and Telfort in Holland, reports The Sunday Telegraph.

It kept these businesses when it demerged its mobile phone operations into the mmO2 mobile arm in November.

This includes the mobile arms of Viag and Telfort as well as BT Cellnet. BT took control of Viag in 2000 for £4.4bn (€7.2bn), which followed the Telfort deal.

A spokesman for BT said: "We always review goodwill at the year end as is usual. But this is speculation in the analyst community."

Write-downs have become an increasing issue in the telecoms and tech industries following the bursting of the tech bubble in 2000.

A number of companies which paid out for businesses at the height of the boom have since seen values slide, and had to write down the difference.

Telewest Communications last week reported a loss of £1.9bn (€3.1bn) after writing down £1.1bn (€1.8bn) on the value of its programming arm Flextech which it bought in April 2000, in a £2.3bn (€3.7bn) deal.

And Marconi last year announced a massive £5.1bn (€8.3bn) loss for the half year after write downs.

Analysts have pencilled in pre-tax profits for BT of around £1.1bn (€1.8bn) for the year to March 31 2002.