Thursday, 19 July, 2018

BT's Gavin Patterson quits under shareholder pressure

Gavin Patterson has been CEO at BT for almost five years Gavin Patterson has been CEO at BT for almost five years
Nellie Chapman | 10 June, 2018, 10:29

Patterson, who led the British group for five years, would remain in his post until a successor is chosen later this year.

Neil Wilson, chief market analyst for Markets.com, said: "The expensive move into football rights was a mistake and evidence that management lacked focus under Patterson".

BT chairman Jan du Plessis said that while the board was generally supportive of the new strategy set out by Patterson and his team in May, given the reaction to it, both he and Patterson had now agreed only a leadership change could actually deliver on these plans.

Patterson said 15 months ago that BT had been taken aback by the flak it had received about the company's customer service and its networks, and he vowed that its millions of customers would see improvements.

He said: "It's been an honour to lead BT since 2013, and serve as a member of the board for the last 10 years". It also spent £12.5bn to buy mobile phone operator EE in 2016.

Shares in the company are at a six-year low and three weeks ago it announced an ambitious restructuring including 13,000 job cuts.

The fact that Openreach is still owned by BT and has avoided being spun-out is also a boon for the firm.

BT's shares jumped 1.8% to 206.6p in early trading, in response to the news.

At the same time, Patterson was embroiled in fractious talks with Britain's telecoms regulator Ofcom about the fate of Openreach, which runs the national broadband network. An Italian accounting scandal caused an estimated 530 million pounds ($710 million) of damage, and in March a year ago BT's Openreach service was slapped with a 42 million pound fine. However, it's been a different story over the last two years.

But the subsequent decline in the share price showed investors were not on side. The decision to overhaul the company was made to cut costs and boost profits as BT invests in 5G technology. He rose to the position of CEO of BT Retail before becoming group CEO in 2013, after his predecessor Ian Livingston left to become a government minister.

"I am confident that, for the remainder of his term, Gavin and his senior management team will continue to display the energy required to deal with every dimension of the task at hand", he said.