Gavin Patterson was sacked in June after five years in the hot seat, with BT actively seeking a new CEO to replace him. According to the Financial Times, some shareholders have challenged his successor to create more shareholder value by selling off Openreach.
The fact that BT will have both a relatively new chairman in Jan du Plessis – who joined last year – and a new CEO has led some investors to seek an overhaul of BT’s structure, the report claims. One unnamed major shareholder reportedly told the FT that the new appointments mean “tere is more chance” of a split.
“I wouldn’t want to be told as a CEO that you can’t break it up. You have to be able to add value,” the shareholder said.
The new CEO is expected to be named by the end of the year, with Patterson continuing to oversee the company for the time being. Ex-Ofcom chief Stephen Carter, currently at Informa, was linked last week, while former EE chief Olaf Swantee (now at Sunrise) and former O2 UK boss Ronan Dunne (now at Verizon) are among the names that have been mooted within the industry. Names mentioned from outside telecoms include the CEO of Rolls Royce and the chief of Severn Trent, Liv Garfield, who used to run Openreach.
BT has battled to keep a hold of Openreach, which owns and maintains the telephone wires, ducts, cabinets and exchanges that connect nearly all homes and businesses in the UK to the national broadband and telephone network, despite strong pressure from rival operators and regulator Ofcom.
Last year, BT agreed to divest Openreach’s staff and non-network assets into a legally separate company, though it stopped short of spinning off the entire business unit, leading to some criticism from rivals.
The settlement between BT and the regulator over the future of Openreach should have brought an end to a decade long dispute about how the UK’s telecoms infrastructure is managed, but if shareholders press ahead with trying place a full separation back on the table, it will open up the discussion all over again.
For du Plessis, the new appointee would continue with Patterson’s plan to cut 13,000 BT jobs over the coming years as part of an attempt to slash more than £1.5 billion form the company’s annual costs. This was in an effort to return shareholder value, and had already been backed by shareholders, meaning the incoming boss must uphold the plan, du Plessis said in an FT interview.
