BT reportedly on the lookout for Jansen's successor

Executive headhunters are reportedly helping UK incumbent BT find its next willing victim to take on the top job.

This is according to a Mail on Sunday report over the weekend, in which an unnamed source said the telco has been sounding out potential successors to chief executive Philip Jansen “for quite some time”, possibly even months. The source also described the succession planning as “an open secret” in the City of London.

The timing is the most interesting aspect to this rumour. If it is an open secret that succession planning has been underway for a while, why wait until late March to feed this information to a national newspaper? Or, has said newspaper been sitting on the information until now, and if so, why?

BT is currently sweating over Ofcom’s decision on Equinox 2, the new wholesale fixed-line pricing regime proposed by its Openreach arm. Ofcom launched a consultation in February with a view to reaching a verdict by the end of this month, in time for the new prices to come into effect at the beginning of April.

Despite stiff opposition from altnets led by CityFibre and the Independent Networks Cooperative Association (INCA), approval seemed to be a foregone conclusion.

That all changed somewhat unexpectedly earlier this month though, when Ofcom extended its review by two months. The watchdog said at the time that the responses to its consultation merited further in-depth assessment. It also said that some of the respondents had flagged comments by Jansen in a Financial Times article in February, which gave the impression that Openreach is on course to establish a potentially dominant position in the wholesale fibre market.

Jansen distanced himself from the article, insisting in correspondence with Ofcom that his comments were taken out of context. However, Ofcom CEO Melanie Dawes was unswayed by the grovelling, and said that the FT piece was a cause of significant concern to the regulator, which is committed to promoting network competition.

In short, the saga is a source of embarrassment to Jansen, and the timing of this weekend’s Mail on Sunday piece has the potential to further undermine his position.

Furthermore, BT’s price hikes are due to come into effect at the end of March, at a time when household budgets have already been stretched to breaking point by rising energy and food costs. Again, this makes the timing of the Mail’s article interesting, to say the least.

Jansen is only four years into his tenure, and the strategy he is pursuing – one of aggressive cost cutting and rapid fibre deployment – has not fully played out yet. It makes one wonder what else might be going on behind the scenes that would prompt rumours of his departure.

If Jansen really is on his way out, who are the most likely candidates for his replacement?

As CEO of BT Consumer, Marc Allera oversees both the retail fixed and mobile operations, and therefore has one of, if not the most, important roles aside from Jansen’s. So he would be an obvious candidate. Alternatively, Openreach’s fibre rollout is laying the foundations for BT’s future, and so its CEO, Clive Selley, might be seen as a logical choice to step in.

An external candidate seems the less likely outcome, but in terms of who could be on BT’s radar, Nick Read springs to mind. The former Vodafone CEO is still serving as an advisor to the board, but that is due to end – funnily enough – on 31 March.

Read stepped down amid frustration that he could not plot a path to growth for the sprawling telecoms empire that would satisfy investors. That might rule him out as a potential replacement for Jansen, but given that as CEO of BT, Read would be joining a company that already has a strategy, maybe not.

It’s also worth keeping in mind that succession planning is normal practice for companies the size of BT, and therefore this Mail report could be making a mountain out of a molehill. Given the criticism of Vodafone that has arisen from its inability to appoint a permanent replacement for Read more than three months after he quit, BT planning for the post-Jansen era makes it look competent by comparison.

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