BT bids farewell to the wrong man with the right plan

Fortune favours the brave, they say – but only sometimes.

No one could accuse Gavin Patterson, the outgoing chief executive of BT, of playing it safe during his time at the helm of the telecoms group.

He bought EE, took on the industry watchdog Ofcom in a lengthy battle and, most boldly of all, transformed the company into a sports broadcaster by taking on Sky in the battle for football rights.

But last month Patterson finally ran out of rope when the company announced he would be stepping down later this year, after investors made it clear they had lost confidence in his ability to lead BT through an ambitious turnaround plan.

Patterson will face shareholders at BT’s annual general meeting in Edinburgh for a final time on Wednesday, reflecting on a career at the company that spans more than 14 years, including the last five as chief executive.

When his departure was announced last month, Patterson was clearly disappointed but insisted there were no hard feelings.

“I’m not somebody who has regrets – I try to look forward. There hasn’t been any falling out. I’m an adult, I’ve seen this movie before.”

But Patterson – along with the rest of us – might have been forgiven for being surprised by the timing of the decision to part ways.

On 10 May, as BT unveiled its new strategic vision, the company’s relatively new chairman, Jan du Plessis, very publicly backed Patterson as the right person with the right plan.

In the matter of a month it turned into a case of the right plan but the wrong person. Or as Du Plessis himself put it: “The board is fully supportive of the strategy recently set out by Gavin and his team. The broader reaction to our recent results announcement has, though, demonstrated to Gavin and me that there is a need for a change of leadership to deliver this strategy.”

Shareholders attending BT’s annual meeting would be well within their rights to ask about the volte-face, and to wonder whether a new chief executive is really going to have the appetite to back a strategy that their predecessor had set out.

City analysts’ take is that although Patterson has transformed BT from a traditional telecoms company into a truly diverse business, he got more wrong than he got right. His acquisition of mobile phone operator EE is still considered a success for BT and a transformative deal, but there is a lengthy list of things that have not gone so well.

Television camera at KC Stadium in Hull

Gavin Patterson transformed BT into a sports broadcaster by taking on Sky in the battle for football rights. Photograph: Oli Scarff/AFP/Getty Images

BT’s share price has tanked during his tenure as the company lurched from one crisis to another. There was the Italian accounting scandal, which wiped almost £8bn off BT’s market value. There was that costly move into sports broadcasting, a record £42m fine from Ofcom for a “serious breach” of rules, and a two-year battle with the communications regulator over Openreach, which controls the UK’s broadband network.

Even Patterson, the man who doesn’t do regrets, has admitted that he got the last one wrong and should have reached an agreement with Ofcom a lot sooner.

Then at the end of May, only weeks after announcing 13,000 job cuts, BT revealed it had paid Patterson £2.3m last year. A fortnight later the company announced he was going.

On Wednesday, just as the board, shareholders and Patterson himself will want to look forward, they will be forced to confront the past.


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