Sunday, 24 September 2017

BT investor calls for CEO to go

By Nick Wood, Total Telecom
Monday 14 August 17

Shareholder reportedly wants U.K. incumbent to look outside the company for an exec with a regulatory, engineering background.

BT CEO Gavin Patterson should be replaced by someone who has a background in regulation and engineering. This is the opinion of one of the U.K. incumbent's major investors, who said in a Telegraph report on Sunday that in hindsight, Patterson was not the right person for the job. According to the report, the unnamed investor is among BT's top 20 shareholders…

BT CEO Gavin Patterson should be replaced by someone who has a background in regulation and engineering.

This is the opinion of one of the U.K. incumbent's major investors, who said in a Telegraph report on Sunday that in hindsight, Patterson was not the right person for the job. According to the report, the unnamed investor is among BT's top 20 shareholders, with a stake worth hundreds of millions of pounds.

Patterson was head of BT Retail when he was named as the successor to former chief executive Ian Livingston in June 2013.

As CEO of BT Retail, Patterson oversaw the launch of BT Sport, and as CEO of the whole company, he brought about the acquisition of mobile operator EE and the reorganisation of the telco's consumer operation into BT Consumer.

While Patterson focused on reinvigorating BT's consumer operation – adding a touch of glitz and glamour by recruiting famous sports stars and actors to front its adverts – trouble was brewing elsewhere in the company.

Telco regulator Ofcom, itself led by a new CEO in Sharon White, forced through a legal separation of BT from its infrastructure arm Openreach, which faces growing competition from altnets cherry-picking lucrative markets for their fibre-to-the-premises (FTTP) deployments.

Openreach also received record a £42 million fine from Ofcom and been ordered to pay compensation that could run to £300 million, after breaking rules by failing to pay broadband providers for late-running Ethernet installations.

Meanwhile, 2016's Brexit vote created an air of uncertainty in the enterprise market, and public sector spending remains pressured.

All these issues were compounded by the accounting scandal at BT Italy, which in January caused an historic fall in the company's share price.

Patterson took a pay cut in May, as BT cut its outlook and announced 4,000 redundancies.

In July, BT revealed it had agreed to pay minority shareholders Deutsche Telekom and Orange £225 million to settle warranty claims related to the decline in BT's shares.

"A lot of what has gone wrong has not been Gavin's fault, but we'd like to see progress on a process and new leadership in the next year," said the BT investor, in Sunday's Telegraph report.

The investor urged BT to look outside the company for new talent, and recruit someone "with a regulatory and preferably also an engineering background."

However, outgoing chairman Sir Mike Rake and incoming chairman Jan du Plessis both told the newspaper that they back BT's under-fire CEO.

All the issues facing BT and its rival U.K. telcos are up for discussion at Connected Britain 2018, which takes place at London's Business Design Centre on 19-20 June. Click here to find out more.

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