Ben bows out as BT prospers

Ben Verwaayen's stint as boss of BT will end on a high note - revenues are up to £20bn and profits stable.

Last Updated: 31 Aug 2010
Revenue for the year to March was up across the board by 2% to a shade over £20bn, and profits of around £2.4bn (not including a one off £400m restructuring charge) remained steady. That may not sound all that exciting, but in these straitened economic times there are plenty of businesses around which would be very happy with those numbers. And this is BT we are talking about - Verwaayen’s achievement in extracting steady annual growth from the once-nationalised behemoth is widely recognised, and when he steps down next month he should find his reputation deservedly enhanced. 

When the Dutch Verwaayen took over six years ago, BT was in the doldrums and he was an unknown quantity in the City. The heady days of the dotcom boom  - on whose coat tails BT had, somewhat unwillingly, taken a ride - were over and the picture looked bleak. The share price was underwater, revenues from its traditional voice business were in long-term decline, corporate strategy was confused and staff morale was poor. It’s a measure of how bad things had got that investors were prepared to countenance a foreign CEO for one of the nation's bluest of blue-chip companies.

Verwaayen quickly realised that what BT needed most of all was a long term growth strategy, and he decided it would come from two core areas – broadband and IT services. He took plenty of flak for driving broadband in particular so hard at the time (not least from other retail broadband providers) but it’s largely thanks to his initiative that the BT Retail now has 4.4m broadband customers, and the UK has one of the highest levels of broadband take up anywhere in the world.  Between them, these ‘new wave’ revenues now account for 40% of group income – and rising. Yes, it’s smaller margin business, but that’s a lot better than the alternative. Even the dreaded customer service is now rated as among the best in the business (although when your competitors number Orange and Tiscali, that’s admittedly not saying all that much).

So how can successor Ian Livingston – first spotted as a rising star by MT's perspicacious hacks nearly 10 years ago – follow this impressive performance? We have only one suggestion for him – get some decent ads made. Jeremy Clarkson may very popular with petrolheads, but Maureen Lipman he ain’t. And don’t get us started on Busby and the voice of Bernard Cribbins. The latest one - featuring Peter Jones and the Gremlins – is much more like it, but there’s a way to go yet…

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