BT: What next?
June 8, 2018
To be honest, I think the surprise isn’t that Gavin Patterson has been ousted as BT CEO, but that it didn’t happen sooner.
To start with the positive: no question getting BT back in the mobile business with the EE acquisition was putting right a terrible mistake – all be it a mistake forced on BT by the parlous state it had got itself into when it sold O2.
But preserving a lead in broadband – which had been handed out by its legacy position as a monopoly rather than won – by A: Fractiously refusing to back down on any concessions on the control of wholesale access and B: Paying billions for football, while C: Providing a very poor service and even worse customer management and D: Steadfastly sticking to copper on the basis ‘Where’s the demand for higher speed?’ until dragged kicking and screaming to fibre by politicians who finally realised BT’s lazy attitude was undermining national competitiveness; this is an alphabet of failure.
When a company cannot be broken up – even though the market, the City and regulators think it would be for the best – because it has allowed a massive black hole of liability to build up in its pension scheme; that isn’t a badge of honour either. And, as for the disingenuousness in the oft-repeated statement that BT had led the charge to the UK being the most digitally-connected nation, that really was the limit. The UK sometimes had slightly more people connected to slightly higher speed than the average in other countries. This ignored the fact that every other western European nation was on a massive charge to go straight from copper broadband to fibre and end up in a place where the UK would be at the bottom of the table, which ever way you cut it up.
What next? Well, obviously a new CEO. But for how long before an acquirer brings in its own CEO? If Brexit goes ‘well’ and BT can continue to be seen as a major (though relatively small) European communications provider, then both European and US predators will be interested. The list of candidates is long and obvious (Deutsche Telekom which already has a chunky stake must be seen as a short favourite). Or, if Brexit goes badly, then the £ will tank and BT will look a bargain – provided a way to narrow the pension black hole can be negotiated.
It isn’t Patterson’s fault BT is where it is – that’s a much longer story, but he hasn’t helped. As the old curse goes: ‘Things can only get better’.