The Six Top Contenders to Fix the World’s Oldest Phone Company
(Bloomberg) -- BT Group Plc’s hunt for a new chief executive officer offers a rare opportunity to lead a FTSE 100 company. It also may be the toughest telecom gig in Europe.
The stock is near a six-year low, with gains under outgoing CEO Gavin Patterson erased following conflict with regulators, an Italian accounting scandal and a lackluster profit outlook. The next leader of Britain’s former phone monopoly will need to juggle demands on cash, from dividends to a government push to spend more on boosting broadband speeds.
“I don’t think they want a flamboyant person,” said shareholder Ally McKinnon, who manages a stake for the Scottish Investment Trust Plc. BT “needs someone who can quietly get on with the government.”
The board prefers to hire externally but probably doesn’t have a big enough budget to attract someone from the U.S. Patterson, whose departure was announced in June, expects to stay on until at least November. Analysts and investors are betting on these top potential candidates:
- Background: Swantee, 52, has been CEO of Sunrise Communications Group AG since 2016; previously was CEO of U.K. mobile operator EE.
- Why? An expert in U.K. network investment who established EE’s 4G mobile service. Swantee is familiar with the leadership at BT’s biggest shareholder, Deutsche Telekom AG, since his days at EE, when it was owned jointly by Deutsche Telekom and France’s Orange SA.
- Why not? Swantee’s ties to Deutsche Telekom could presage a closer relationship with the German carrier, said Berenberg analyst Carl Murdock-Smith — not something all investors would want.
- His comment: Sunrise said it was aware of speculation linking Swantee to BT but he was focusing on his current job.
- Background: Kirkby, 51, has been CEO of Sweden’s Tele2 AB since 2015.
- Why? She briefly led finance operations and business transformation at BT’s network rival Virgin Media, and is open to offers later this year when she leaves her current role at Tele2.
Would bring better gender balance to management. BT’s board has no female executive directors and the industry’s top echelons are overwhelmingly male.
- Why not? BT’s business sprawls from mobile and fixed to enterprise and consulting whereas Tele2’s sales are overwhelmingly mobile. She’s also spent less time dealing with regulator Ofcom than some other contenders.
- Her comment: Kirkby declined to comment to Bloomberg.
- Background: Carter, 54, has been CEO of Informa Plc since 2013, former minister and adviser to Labour Prime Minister Gordon Brown, and former COO of NTL (now part of Liberty Global Plc’s Virgin Media).
- Why? Political and finance industry connections may help thaw BT’s frosty relations with government. BT could also use his restructuring experience.
- Why not? Timing: Informa won’t want to see Carter walk just after it completed the acquisition of UBM Plc. Also, Carter was the first head of Ofcom at its launch in 2003. Conversations between the industry watchdog’s current leadership and its former chief have the potential to get awkward.
- His comment: Carter didn’t rule himself out for the BT job in a June 15 interview with Bloomberg, but said he was focused on Informa and “the rest is noise.”
- Background: Garfield, 42, has been CEO of British utility Severn Trent Plc since 2014.
- Why? Plenty of experience dealing with regulators as BT’s former head of strategy and regulatory affairs, then CEO of network division Openreach.
- Why not? Ofcom slapped Openreach with a record fine in 2017 for a breach of competition rules on her watch.
- Her comment: Garfield said she was “committed to Severn Trent” at the Times CEO Summit in June and a company representative reiterated that.
- Background: Lowth, 56, has been CFO of BT since 2016
- Why? An engineer by training who knows the balance sheet inside out and has impressed investors.
- Why not? The search is external first and Lowth may find it tricky to break with the past with his signature on decisions which led BT to its current situation.
- His comment: BT declined to comment on behalf of Lowth.
- Background: Allera, 46, is CEO of BT’s consumer division.
- Why? A strong communicator who entered the business with the purchase of EE, which has proven to be a bright spot in BT’s sprawling operations.
- Why not? Allera launched a strategy for the new combined consumer unit in recent weeks and the result is yet to be seen.
- His comment: Allera declined to comment.
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