BT chief steps down

BT's chief executive Ben Verwaayen is to leave the company at the end of May. He will be replaced by Ian Livingston, currently chief executive of BT Retail, the telco said on Tuesday.

Verwaayen [pictured] has been at the helm of BT for six years, transforming it from a telecoms company focused on its local loop infrastructure into an IT and communications provider with a range of broadband and mobile services. The Dutchman has also invested in its corporate arm, BT Global Services, which is now its most profitable division, and oversaw the creation of Openreach, its local loop entity.

BT's chairman Mike Rake said on Tuesday that the company had been "deeply troubled" when Verwaayen took the reins, but that he had transformed it into a "thriving business with global capability".

At the time of Verwaayen's arrival, BT had been plagued with tens of billions of pounds of debt, and had just sold off its mobile activities to O2 — which many observers had termed its "crown jewels". Broadband take-up was also sluggish and availability was limited. During Verwaayen's reign the number of broadband lines using BT's infrastructure grew from 167,000 in March 2002 to 12.2 million in December 2007.

"We noted his impressive achievements — sorting out the mess he inherited when he joined BT in 2002," said Mike Cansfield, telecoms strategy practice leader for Ovum. "His legacy is a company that is in good financial health, well managed and one that embraces change."

The suggestion that BT is in good financial health may be questioned by some commentators: its quarterly pre-tax profits fell 30 percent year-on-year according to its latest results.

The company has also carried out a £450m restructuring programme aimed at shifting its focus from voice to web-based services. The restructuring has seen the creation of two new divisions — BT Design and BT Operate — and up to 5,000 managers taking early retirement.

Verwaayen, 56, has declared no plans for his future. Last year it was suggested he would go into politics in the Netherlands, although he scotched the rumours at the time. He is well-placed to accept a governmental role, having been honoured in three countries including the UK, where he has received an honorary knighthood for services to communications.

Verwaayen has also been awarded a Chevalier de la Legion d'honneur by the French government and been honoured in his home country with the Order of the Netherlands Lion, or Oranje-Nassau, which is the equivalent of an British knighthood.

Livingston has been widely touted as Verwaayen's successor since the departure of Andy Green, head of strategy and operations last October. Green had been a frontrunner for the position at the time.

An accountant by trade, 43-year-old Livingston has overseen BT Retail's secret trials of Phorm, a technology that tracks users' browsing habits. Phorm has been deeply unpopular with many users, who say it breaches their privacy and possibly the law.

Prior to that, Livingston was group finance director for BT and for the Dixons Group. He also helped to set up Freeserve, one of the most powerful forces behind the widespread availability of dial-up internet in the mid-1990s.

Ovum's Cansfield said: "Ian Livingston has long been the obvious internal candidate. Along with Ben and ex-chairman Sir Christopher Bland, as group CFO he was part of the trio that led BT back from the abyss... BT has clearly mastered succession planning."

Livingston will be replaced as BT Retail chief executive by Gavin Patterson, currently group managing director of BT's consumer division.