BT Group have announced that they are to demand a demonstration of cost savings from network equipment suppliers, or they are to refuse to pay in full for the equipment. This is a part of the telecom giant"s attempts to save £2bn in the next two years.
They have said that the money they pay to the vendors will depend on the savings they make over a set period and this will be done using a small payment initially, followed by continued payment conditional on savings. The CEO of BT Wholesale has claimed that this could result in different vendors being given the opportunity to work with BT, but it will inevitably result in some firms suffering in an already difficult market.
This deal is being touted as a "partnership" by BT and the savings are expected to be a result of new kit that allows BT to make cuts in staff and expenditure due to the functionality of the equipment. BT Wholesale has already cut staff levels significantly and has seen 2000 staff made redundant recently. BT aim to reduce staff levels by 5,000 to 6,000 a year due to the need to cut back on spending.