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“Your call is important to us,” is one of those phrase that becomes less convincing the more often it is repeated. BT Group boss Philip Jansen has beefed up customer service levels accordingly. But his own call to the stock market helpline still rings out forlornly. The share price has dropped 38 per cent since he took over some four years ago.
Jansen will leave next year. His successor at the UK telecoms group will not have it any easier.
Perennial candidates include Marc Allera at BT’s consumer division and Olaf Swantee, the former head of EE mobile. A new chief must lift the share price without reducing investment, while perhaps coping with a Labour government in early 2025.
After a successful stint leading payments group Worldpay, one wonders what Jansen saw in BT Group. As a triple-play provider of broadband, mobile and video, it has needed heavy investment. Shareholders wanted dividends. Instead, free cash flow collapsed almost two-thirds to about £1bn and dividends per share by 47 per cent.
Could Jansen have done better? Not with Ofcom demanding a full-fibre rollout to homes and expansion of the 5G network. Fibre now reaches nearly half of the 25mn homes scheduled by end 2026, while the UK has 65 per cent 5G mobile coverage.
No triumphant exit was possible for Jansen. BT’s big pension fund gets in the way of a sale. Its deficit has contracted to £3bn since a trustee estimate of £4bn last summer, said New Street’s James Ratzer. A worst-case estimate of what BT would owe pension scheme trustees in a takeover would be about £12bn.
That acts as a poison pill for those circling BT, including largest shareholder Franco-Israeli billionaire Patrick Drahi with 24.5 per cent. Hopes of bolstering an enterprise value to forward ebitda value, wallowing near four-year lows at under 4 times, have faded.
Even a business-friendly Labour government would not want to see a radical restructuring. Jansen’s disconnection will be well timed.
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