Ian Livingston's first set of results as BT's chief executive received a downbeat reception. The former incumbent's shares fell 12 per cent in what was the company's largest daily drop since the telecommunications bubble popped in early 2000. Mr Livingston, who only took over in June, has set out some sensiblelooking strategic priorities, focusing on better customer service as a path to cost savings and ways to make BT more agile. But they have yet to grab investors. BT has almost halved in value since last year's peak, underperforming France Telecom by 41 per cent, Deutsche Telekom by 40 per cent and Telefónica by 36 per cent.

Investors were disappointed on three levels. First, margins at the earnings before interest, tax, depreciation and amortisation level within the group's fast-growing business services division (long-term contracts to supply big companies and governments with global networks), came in at 9.5 per cent, some 170 basis points below consensus forecasts. Second, even though Mr Livingston affirmed his full-year free cash flow forecast of £1.4bn, a weak first quarter leaves room for doubt. Lastly, BT's pension surplus, which hit £1.4bn in June 2007, swung into a £600m deficit, reversing some of the progress of the Ben Verwaayen era.