BT CEO Jansen confirms he's quitting within 12 months

BT’s CEO Philip Jansen today fired the starting gun on the race to find his successor by confirming he intends to stand down from his role inside 12 months, ending what some have branded a “rollercoaster” tenure.

The former British state-owned telco told the London Stock Exchange that it is well prepared for succession planning with all "appropriate candidates" being considered and an update on progress scheduled "for the summer."

Jansen said in a statement: "We've made a lot of progress over the last four and half years and I'm proud of what we've achieved to date. We're investing heavily in both BT's and the UK's future. We're building like fury, have now passed 11 million homes with fiber, have got 5G service to 68 percent of the country and our customer service is much improved."

The outgoing CEO conceded, however, "there's a lot more to do and I am fully committed to driving the business forward until I hand over to my successor."

Jansen became the boss at BT in February 2019, inheriting a major cost-cutting campaign launched by his predecessor Gavin Patterson, which involved chopping 13,000 heads over multiple years and saw the biz vacate some 90 percent of its real estate holdings. He also took on the fundamental task of slowing revenue declines and remoulding BT into a business that generated higher profits.

In 2019, BT reported revenue of £23.459 billion, down 1 percent year-on-year and with profit before tax of £2.7 billion. In the latest full financial year ended 31 March 2023, revenue was £20.681 billion and profit before tax was £1.729 billion. During that same timeframe, the share price has fallen from £230 to £122.25.

According to Kester Mann, director of consumer and connectivity at CCS Insights, BT's boss was on "increasingly shaky ground at BT. The company's share has almost halved since he took over in early 2019, while inflammatory comments about the role of alt nets drew concern from Ofcom."

Jansen wrote to the comms regulator in February [PDF] saying he welcomes competition and claiming his comments quoted in an FT article were taken out of context.

In the piece he was reported as saying: "There is only going to be one national network" and "Why do we need multiple providers?", which runs contrary to the competitive environment Ofcom wants to nurture.

Mann added: "The CEO has endured a rollercoaster ride at BT. He presided over the operator's impressive response to the pandemic; embarked on a massive cost-saving drive; oversaw a major acceleration in the deployment of full-fiber; witnessed Patrick Drahi take a near-25 percent stake, and watched thousands strike over pay."

In one of his more tone deaf moments, Jansen received a 30 plus percent pay rise in fiscal 2022 to £3.35 million. Some staff looked unfavorably on the £1,500 flat rate pay rises they were awarded, and when BT refused to cave into union demands for an above inflation increase it laid the ground for a stand-off and the first nationwide strike at BT since 1987. More than 26,000 voted for industrial action and this took place over multiples days from the summer until December.

The strike dented productivity and slowed the rate of broadband connections, so BT got back round the negotiating table and agreed higher rises for 58,000 staff at the end of 2022.

Jansen announced last month that he was going to waive future salary increases but made no mention of how his bonus structure would change.

Just like his predecessor, Patterson, who confirmed sweeping changes to reduce overheads before he split for pastures new, so Jansen is also the architect of planned upheaval at BT, much of which will happen after he's gone. BT in May confirmed an intent to chop up to 55,000 jobs, or 42 percent of the workforce, by 2030 to boost profits.

BT thinks it'll need fewer engineers as the FTTP rollout will be completed, and it anticipates using AI in customer services to automate functions. These are just a few of the areas in which job losses are expected.

Mann at CCS Insight reckons BT will confirm a replacement CEO in weeks and while "there appears no obvious initial candidate to take it on, BT will likely cast its net wide, both internally, and elsewhere within the telco sector and potentially in a different industry altogether."

Paolo Pescatore, tech, media and telco analyst at PP Foresight, agreed: "All eyes now turn on the successor. A prime candidate is already at the business with Marc Allera who heads up the consumer segment."

Analysts at Megabuyte said today that when Jansen became CEO they believed his immediate proprieties included "bedding in" the merged Consumer and acquired EE business, as well as the Wholesale and Business divisions; "sorting out Global Services (it is merging with the Enterprise division"; and "potentially re-evaluating the role of Openreach)", although BT rejected external funding for FTTP builds and instead got taxpayer support.

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"What Jansen will probably be most remembered for, though, is extricating BT from Sport and driving BT's FTTP rollout (as noted, now over 11 million premises of the formal 25 million end 2026 target and potential 30 million end decade target) and take-up (penetration of 31 percent at March 2023, sold via BT Retail and other ISPs such as Sky, Vodafone and TalkTalk). This, in turn, is key to BT's target of doubling free cash flow by the end of the decade, though one challenge for Jansen's successor will be achieving the related analogue network switch-off by the target end of 2025.

"Jansen won't, however, be remembered for driving shareholder value, with BT's current 122p share price barely half what it was when he joined, despite Altice/Patrick Draghi acquiring a 24.5 percent stake.; whilst BT's EBITDA has increased 8 percent over the period to £7.9 billion (fiscal 2023), EBITDA-capex has fallen 29 percent to £2.6 billion due to the FTTP build.

As for what comes next for Jansen – who joined BT from Worldpay, where he was the boss from 2013 and led it through an IPO – he has yet to say. ®