BT Group Confirm UK CEO Philip Jansen to Exit Within 12 Months
BT Group, which includes Openreach, Plusnet, and EE, has stated today that its CEO, Philip Jansen, will depart the company "within the next 12 months" when the timing is right. Jansen assumed his position in February 2019, and during his tenure, the company's share price dropped significantly from approximately 230p to 122p.
In 2019, there were only a few individuals who did not believe that BT should make some necessary changes. This was mainly due to the fact that the company was beginning to face increased competition in the field of network infrastructure. Additionally, BT had difficulties in transforming their large investment in TV and sports content into a highly profitable venture, which they had originally anticipated.
IMPORTANT: BT has committed to a substantial investment of up to £15 billion towards Openreach. This investment will primarily focus on the development of FTTP (Fiber to the Premises) broadband infrastructure. The goal is to cover approximately 25 million premises across the United Kingdom by December 2026, significantly increasing the current coverage of 11 million premises.
Jansen's strategy involved intensifying the implementation of Fibre-to-the-Premises (FTTP) lines throughout the UK in order to address this issue. Additionally, he pursued significant cost reductions by implementing job cuts and restructuring measures. Another aspect of his approach was to decrease the operator's emphasis on the Pay TV market and streamline their branding by transforming EE into BT's primary consumer brand for broadband, phone, and mobile services (although we remain skeptical about the success of this decision).
Although Jansen's time as BT's leader has not been without its challenges, it was evident during the operator's recent conflict with labor unions over wages, leading to a series of nationwide strikes – a first for BT since 1987. Concurrently, the company's CEO saw a 32% salary raise while also dealing with increased rumors of a potential acquisition by Altice UK, led by Patrick Drahi.
In addition to everything mentioned above, Jansen also faced criticism following a contentious interview with the Financial Times. This interview stirred up major worry at Ofcom after he seemed to imply that once the implementation of full fibre was finished, there would only be a single network across the nation, leading to disastrous outcomes for certain alternative networks. Jansen later clarified that his statements were misinterpreted.
It goes without saying that it was expected by many when, in March 2023 (out here), the initial reports started indicating that the company might have already initiated the search for a new leader, and this has now been verified.
In the blog post, Adam Crozier, the Chairman of BT Group, expressed
Philip has performed exceptionally well during his tenure at BT, and the Board is wholeheartedly backing our long-term plan, which he and his team are actively pursuing. Although we are still in the initial stages of this transformation, we are making good progress and will meet our goals as intended.
The Board was completely ready for the transition process to find a replacement for Philip. We are currently evaluating all suitable contenders and plan to keep the market informed about our advancements throughout the summer. In the meantime, regular operations will continue, and our primary focus remains on implementing our strategies and satisfying all our stakeholders.
Philip Jansen, Chief Executive of BT Group, stated:
In the past four and a half years, we have made great strides and I take pride in our accomplishments thus far. We are dedicating significant resources towards shaping the future of BT and the UK. We are constructing at a rapid pace, reaching over 11 million households with fiber connectivity. Moreover, our 5G network covers 68% of the nation and our customer service has shown remarkable enhancements.
This is constructing a significantly more robust BT Group, which is now propelling progress for both shareholders and the United Kingdom. However, there are plenty of additional tasks remaining, and I am completely dedicated to pushing the company ahead until I pass the baton to my eventual replacement.
In actuality, it is currently 2023 and the BT Group must pay attention to both their forthcoming plan (after finishing their complete fiber network) and Ofcom's upcoming strategic market review, along with several market reviews happening every 5 years. This is an aspect where they must maintain a positive relationship with the regulatory body (unhelpful comments from FT have hindered this). Additionally, dealing with thousands of outdated telephone exchanges and copper cables during the retirement process is exceptionally intricate.
Nevertheless, substituting the CEO frequently leads to alterations in the approach, consequently rendering any predictions regarding BT's future actions in the next 5–10 years uncertain once more. A great deal of this uncertainty relies on the identity of the individual chosen to take over from Jansen. They may opt for a completely fresh face or opt to internally promote Marc Allera, the present head of BT's Consumer brands.
In addition, it is important to keep in mind that BT's future success is also influenced by the actions of their rivals. This is particularly evident in the UK's full fibre market, where BT is facing increasing competition from numerous alternative networks. While some consolidation will inevitably occur, BT cannot escape the reality that they will not have the same level of control as they did in the past. The only positive aspect for BT is that Ofcom's regulation of the dominant incumbent is likely to become less strict in the future. However, we do not anticipate any significant changes in this regard until after 2030.
