Sir Iain Vallance has stepped down as chairman of British Telecom, which bought Esat Telecom last year. He is to be replaced by Sir Christopher Bland, the chairman of the BBC's board of governors.
Vallance's early departure as BT chairman - he was due to retire next year -comes as the company faces up to a £30bn sterling debt mountain and a share price which has been on the slide.
The slide continued after today's announcement, with BT shares closing down 5.17% to 549p sterling in London this evening.
With the telecoms sector under increasing pressure, the state of BT's balance sheet has become the overriding concern for investors.
Its financial difficulties partly stem from spending £10bn on acquiring next generation mobile phone licences in the UK and Germany. BT has pledged to wipe £10bn off its debt mountain by the end of this year and needs to do so fast in order to satisfy credit rating agencies.
Calls for Vallance and chief executive Sir Peter Bonfield to depart have intensified since the turn of the year. City institutions were concerned that the pair had failed to prevent the slide in BT's share price and wanted an urgent management overhaul.
