Ben Verwaayen, the man credited with pushing BT into broadband, has stepped down as CEO and handed over the reins to Ian Livingston, head of the retail division.
Livingston, currently boss of the company’s Retail division that sells phone and data services to home and business users, will take the post on 1 June, after Verwaayen steps down. His annual basic salary will be £850,000 with further remuneration if he hits targets, according to reports in the press. Gavin Patterson, managing director at the BT consumer arm, will run BT Retail.
The telecommunications firm praised Livingston’s work so far, saying in a statement: “Under his leadership, BT Retail has returned to growth and sharply increased profitability.” Livingston was also a finance director at BT, and previously at electricals retailer Dixons.
Last year, the company said it was using sophisticated business intelligence programs to retain in particular its high-profit customers in a competitive market, and target them more effectively with promotions.
Ben Verwaayen steps down after six years in the hot seat at BT. He became chief executive at BT in 2002, after being at the helm of telecoms hardware manufacturer Lucent. He has been accredited with pushing BT aggressively into broadband at times when fixed line revenues were falling fast.
“Ben has done more than anyone else to make Britain the most competitive broadband market in the world,” said BT chairman Sir Mike Rake.
Rake called Verwaayen “an exceptional CEO whose courage and leadership has transformed BT from being a deeply troubled organisation into a thriving business with global capability and a clear strategy for the future”.
Verwaayen, sometimes known as an abrasive character with much self conviction, also pushed for the expansion of the company’s IT services wing, BT Global Services, which is now a key revenue driver for the group.
Following extensive discussions with telecoms regulator Ofcom, BT under Verwaayen's watch agreed to set up Openreach in 2005, a division that promised to allow all other operators fair access to the sought after BT network.
Verwaayen has also been awarded a Légion d’Honneur medal by the French government for his services to global telecommunications, and recently received an honorary knighthood.
BT will next month release its annual report for results to 31 March. Revenue was £20.2 billion in the year to March 2007, generating a 15 percent pre-tax profit jump to £2.5 billion.
But in the last quarter, the BT wholesale division dragged on group profits as rival telecoms firms set up their own networks instead of buying access from BT. Pre-tax profits fell by seven per cent year-on-year, and the company’s share price has dropped 30 per cent in the last nine months.
Livingston is regularly termed by the press and the markets as a cost-cutter, causing many investors to welcome his appointment as BT continues with a programme to slash operating expenses by £600m annually. BT is in the middle of a major project, known as the 21st Century Network, or 21CN, to replace old network infrastructure with modern technology that can handle the vast amounts of data traffic in the UK and drive major cost reductions at the company.
Under the project, 35 per cent of the UK core network has been rebuit in the four years so far. The project is due for completion in 2011 and BT has promised to rationalise 1,300 separate applications, onto 14 main platforms.
In May 2007, BT announced plans to accelerate its transformation into a communications services company delivering software driven services over broadband.
The company also opened a global operations centre in India in March.
BT is a key contractor on the £12.4bn NHS National Programme for IT.
In February it was also chosen to host the trading platform of Project Turquoise, the trading facility set up by nine large European investment banks.
It will also be the communications service provider for the London Olympics in 2012.
Last week, it emerged that more than 30,000 BT Broadband users were used to secretly test the controversial Phorm online advertising system in two separate tests in 2006 and 2007. BT actions breached the Regulation of Investigatory Powers Act (RIPA) 2000 that states it is an offence to intercept internet traffic without consent or a warrant, but the company said no personally identifiable information had been processed or stored.