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“The next generation of content is not what the big entertainment companies make. It’s what people make themselves. People my age have no idea that a lot of opinion-forming happens in cyberspace. You’ll find BT Vision is delivering capabilities to the living room for people to make their own content and share it with others in a way we have not seen before.”

At present these wonders are confined to some 200 BT staff who are testing the service. Rivals have suggested that BT and Microsoft are struggling to get it to work reliably. The launch date, originally set for this summer, was put back to the autumn. Last week Verwaayen said BT Vision would be available “by the end of this year”.

Verwaayen shrugged off the scepticism. “It’s going very well,” he said. “We’re on track to do something that’s really important to us. The reality is we have something that is new.”

BT’s Dutch chief executive knows customer expectations of television are demanding — and that the occasional instability of computers running Microsoft Windows will not be acceptable.

“I don’t have to tell you what will happen if I’m in the middle of an Arsenal match and I have a problem. I would not look kindly on that, and that [view] is shared with many others.”

Nonetheless, Verwaayen said he was “really confident” that the technology side would surprise people in its capabilities.

At this stage he is coy about the costs of watching BT Vision. It seems likely that the Philips set-top boxes will be sold at a modest price. There will be no subscription fee, but viewers will have to pay to watch on-demand programmes.

One of Verwaayen’s biggest successes was in jump-starting Britain’s adoption of broadband. Through BT Wholesale, the group recently acquired its eight millionth broadband customer. Sales targets have repeatedly been blown away, and new customers are switching to high-speed internet connections at the rate of 250,000 a month.

Carphone Warehouse has recently shaken up the market by offering “free” broadband to those who sign up for its Talk Talk fixed-line telephony service at £20.99 a month.

Verwaayen said the Talk Talk launch had made no impact on the growth trends in BT’s business. “When Lada comes out with a new car, it doesn’t mean BMW is shaking in its boots. People believe this is a price-only market, which is wrong.”

Carphone is one of a number of companies competing more aggressively by “unbundling the local loop” — installing their own equipment in BT’s exchanges to cut their dependence on BT Wholesale, thus giving them more control and better profit margins.

Under last year’s regulatory settlement with Ofcom, BT is obliged to introduce an automated process for unbundling by the end of next month. The current process is clumsy and complicated, with extensive need for manual intervention and a big potential for delay.

As The Sunday Times reported last month, some experts doubt whether BT will be able to introduce the new system on time. Peter Black, the industry’s telecoms adjudicator, recently said: “All concerned are aware that this is a challenging deliverable.”

According to BT insiders, an “angry” Verwaayen recently called a meeting of IT managers to stress the importance of the June deadline. Last week Verwaayen insisted the system would be in place on time.

Broadband revenues are now running at more than £400m a quarter but an even bigger contributor to BT’s gathering momentum comes from the IT services business. BT Global Services, run by Andy Green, builds and runs sophisticated data-communications networks for the likes of Visa International, Reuters and Unilever. BT is also one of the lead contractors building a new patient-records systems for the NHS.

Verwaayen said BT had won so many big international contracts over the past couple of years that fresh customer wins had ceased to be newsworthy.

Nonetheless, the profitability of the NHS work and of the other long-term contracts Global Services has won, remains far from clear. This business and the risk it entails are much less transparent than running the nation’s telephone service.

Verwaayen acknowledges the concern, but says only time will prove the profitability of this business.

BT is still travelling down the hallway away from grandma’s bakelite phone. But Verwaayen has managed to stabilise and give confidence to an organisation that was once a byword for mismanagement and squandered opportunity.

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