BT successor has their work cut out, say analysts
The successor of outgoing BT boss Philip Jansen faces a tough job ahead as the company battles poor earnings amid the pressure to rollout 5G, analysts have warned.
It comes as BT confirmed today Jansen will step down “at an appropriate moment” within the next year.
“Whoever takes the hot seat at BT will be picking up the reins on a difficult transformation,” said Matt Britzman, equity analyst at Hargreaves Lansdown, adding there could be “some promise”.
He said cost cutting is likely to be a priority for the successor as it focuses on expanding the UK fibre and 5G networks while streamlining operations and slashing up to 55,000 jobs by 2030.
“One thing’s for sure, there’ll be plenty of challenges to grapple with.”
Previously, BT announced job cuts as part of efforts to create a more efficient operation, aiming for sustainable growth once 5G infrastructure is in place.
Russ Mould, investment director at AJ Bell, said “sadly, Jansen is not going to be remembered for being the person who breathed life back into BT.”
Jansen had a “massive list of problems” when he joined the firm in 2019 but despite his “logical” decisions, the company is still has remained a “slow, creaking juggernaut”, said Mould.
Under the ex chief, over £10bn has been wiped off BT’s value.
“BT has to be one of the least glamorous jobs going,” he added.
TMT analyst Paolo Pescatore said Jansen’s exit has been “on the cards for sometime” and eyes are now searching for a successor. He named Marc Allera, head of consumer brands at BT, as a “prime candidate”.
He continued: ” ‘[Jansen] has helped navigate the group through a difficult period. Probably time to think about the next chapter for both him and BT. Openreach is now in a better place, consolidated the enterprise function and moving away from costly sports rights.”
In a statement this morning, the telecoms giant said its nominations committee has been conducting a formal succession process.
Adam Crozier, BT Group Chairman, said: “Philip has done an excellent job in his time at BT and the Board is fully supportive of our long-term strategy which he and his team are pursuing.”
He added that the Board was “well prepared” for the succession process to begin and they expect an update on progress over summer.
“In the meantime, it is business as usual,” he added.
BT is predicted a decline in earnings for the current financial year, with limited growth anticipated in the next two years.
Shares in the telecoms giant have spiked 0.3 per cent today.
City PM has approached BT for further comment.