British Telecom Chairman Sir George Jefferson announced his resignation after admitting to shareholders that some recent criticism of the company's performance is justified.
The government warned the company Wednesday that it would lose its virtual monopoly unless it improved its service.
However, a spokesman said the resignation of Jefferson, who has been with British Telecom for seven years, was not linked to the criticism of poor service by the company, which was privatized in 1984.
Jefferson, 66, told shareholders at the annual general meeting that he would be replaced by CEO Iain Vallance on Oct. 1. He said that he had wanted to step down last year but had postponed his decision until after the June general election because of the opposition Labor Party's threat to nationalize the company if it came to power.