Pierre Danon, the chief executive of BT Retail, is leaving the company to become chief operating officer of IT services supplier Capgemini.

Under Danon, the division of BT responsible for its customer relations has increased profits, cut costs by £800m, and reduced staff numbers from 52,000 to 38,000.

'Pierre has done a superb job at BT Retail and he will make an outstanding contribution as chief operating officer at Capgemini,' said BT chief executive Ben Verwaayen.

Danon's departure comes soon after communications regulator Ofcom's latest telecoms market review told BT it had to ensure that its rivals had the same access to its wholesale division as the BT Retail arm.

There have been persistent rumours of in-fighting over the extent to which Danon would be allowed to operate his division independently from BT's network infrastructure - for example, by investing in its own local-loop unbundling rather than reselling the BT Wholesale offering.

Julian Hewett, chief analyst at Ovum, says the rumours may have had some substance.

'It's probably an indication of a more general disagreement over whether BT Retail should just be a retail channel, or whether it should have more freedom to invest in its own business development,' he said.

Danon takes up his new post in the New Year.