Growth in British Telecom's consumer and mobile businesses is expected to restore some investor confidence after disclosures of accounting errors at its Italian business led to the departure of Corrado Sciolla, the chief executive of BT Italy.

The British telecom giant has reportedly appointed Luis Alvarez, the head of BT's multinational corporate division, to lead the firm's European business.

Approximately £7.8 billion, or just over a fifth, was wiped off the telecom firm's stock market value as of 2:25 p.m. ET Jan. 24 before recovering slightly Jan. 25. The U.K. operator now faces a £530 million write-down, tripling the initial estimate of £145 million from October 2016.

The disclosure raises questions about the future of BT's global services division and will overshadow a key period for BT as it embarks on the latest auction for expensive football rights and faces a renewed threat from U.K. multiplay providers such as Sky plc, according to CCS Insight analyst Kester Mann.

At any rate, Mann insists BT is taking a step in the right direction: "BT appears to have acted swiftly."

"Although it is taking a financial hit, it is vital the company moves to protect its reputation," he added.

Despite a £120 million reduction in its third quarter adjusted revenue and EBITDA as a result of the Italy write-down, BT said its consumer-facing business is set to report good revenue and ARPU growth on Jan. 27, with U.K. mobile operator EE achieving revenue growth for the first time.

"The move back to mobile was an important strategic move that appears to be boding well for BT," according to 451 Research Vice President Declan Lonergan.

"There is nothing to suggest problems in corporate governance run deeper so once the uncertainly is dealt with, one would hope that the group will go back to the solid path it was on," he said in an interview.

For now, trading in the group's consumer-facing businesses remains "strong," according to Hargreaves Lansdown equity analyst George Salmon.

In particular, Salmon highlighted BT's transformation from a broadband and fixed line business into a provider of so-called quad-play services, offering a TV package, which includes Premier League football, and its EE network.

In contrast, the future of its Italian business, whose unfolding scandal plays the biggest role in BT's lower earnings outlook this year, remains in question. In fact, Sky reportedly faces a criminal inquiry over the accounting affair.

Steve Malcolm, an analyst with independent research firm Arete, insists BT needs to isolate the Italian market by giving investors a credible turnaround or exit strategy for that business.

"You could probably settle half of yesterday's problems by resolving the situation in Italy," Malcolm said.

With the EBITDA contribution of the Italian business amounting to around 1% of the group's reported EBITDA for the financial year ended March 31, 2016, shareholders will be hoping that the company's Italian trouble is nothing more than a blip on its radar.

Aside from its Italian unit, BT faces a growing list of challenges, from an expanding pension deficit to ambiguity over the future of Openreach.

More crucially, the group's enterprise business has been deeply impacted by economic uncertainty, followed by reduced spending in the U.K. public sector and international corporate markets.

In a Jan. 24 statement, BT said this slowdown in business would lead to a double-digit year-on-year percentage decline in fourth quarter underlying EBITDA for its business and public sector division.