BT has announced to its workforce that no pay rises will be handed out this year.
The telecoms giant made the announcement amid the ongoing economic downturn, which it described as "challenging".
A planned £1.5 billion investment into a fibre-optic cable broadband network in the UK is also thought to have been a factor in the decision.
"BT can confirm that, after careful consideration, there will be no pay rises as a result of this year's review of salaries," said a BT spokesperson.
Adding: "This has not been an easy decision but, given the tough economic climate, it is important BT meets these challenging times head on."
BT was recently given the green light by industry regulator Ofcom to construct a next-generation network to reach ten million addresses by the year 2012.