<div id="readability-page-1"><div><div><p>As BT marks its 180th anniversary this year, the world’s oldest telecoms company has much to celebrate.</p><p>Under Allison Kirkby, who is entering her third year as boss, the FTSE 100 giant’s investment in full-fibre broadband is finally beginning to reap rewards after years of eye-watering spending. Shares have risen by 70pc since she took over.</p><p>But beneath the surface, a more complex picture emerges. BT is facing fierce competition both from a powerful new mobile operator in VodafoneThree and from struggling but scrappy “alt-net” broadband rivals.</p><p>As the end of its fibre rollout looms into view, Kirkby must now work out how to define BT’s identity in a cut-throat market. And a confusing rebrand and radical boardroom clear-out haven’t helped.</p><p>Meanwhile, Sunil Bharti Mittal – the Indian telecoms billionaire who is now BT’s biggest shareholder – has taken a seat on the board and is demanding more from Kirkby and Adam Crozier, the chairman.</p><p>Kirkby has been keen to emphasise BT’s resilience in a competitive market. But the business is losing broadband customers and, with a demanding shareholder breathing down her neck, the chief executive needs to show she’s got a plan for growth.</p><p>“If there’s any cultural mismatch, it’s that BT continues to lose market share in key segments quarter on quarter,” says a source close to Mittal. “Bharti doesn’t accept losing market share, it’s not the Bharti way.”</p><p>Next week will be a critical moment as Kirkby unveils the company’s latest quarterly results.</p><p>A no-nonsense Glaswegian, Kirkby took up one of the biggest jobs in British business in February 2024 after moving from Swedish telecoms company Telia.</p><p>Despite her sitting on BT’s board since 2019, major shareholders including Deutsche Telekom and Patrick Drahi – who has since sold his stake – were taken by surprise when Kirkby’s appointment was announced in 2023.</p></div></div><div><div><p>The telecoms chief has had a charmed tenure to date. Kirkby came in with a promise to slash BT’s heavy investment in its broadband network, stripping out £3bn of costs and increasing returns to shareholders.</p><p>The plan was cheered by investors, with BT enjoying its best day since the dotcom boom in May 2024.</p><p>But even Kirkby’s most ardent supporters acknowledge that she was blessed with impeccable timing.</p><p>Under predecessor Philip Jansen, BT doggedly pumped billions of pounds into full-fibre broadband. Kirkby’s arrival coincided with the peak of that spending, allowing her to dial it back just as the telecoms giant began to cash in on the investment.</p><p>Seen in this context, Kirkby’s market-friendly announcements were largely a confirmation of the strategy already in train, rather than representing an ambitious new approach.</p></div></div><div><div><p>But the new BT boss has undoubtedly taken some decisive action. She has carved out the group’s struggling international division and is pursuing a possible sale. A smattering of other non-core businesses, including BT’s Italian division and some of its operations in Ireland, have already been sold off.</p><p>Kirkby has also wielded the axe as part of her ambitious cost-saving plan. Headcount fell by 5,000 in the six months to the end of September, though many of these cuts reflect reduced need for engineers as the full-fibre rollout nears fruition.</p><p>However, BT’s underlying trading has stalled. Revenue fell 3pc in the first half of the financial year to £9.8bn, which the company blamed on lower demand for handsets and tough pricing competition, while pre-tax profit was down 11pc.</p><p>Following the £15bn merger of Vodafone and Three last year, BT’s EE has also lost its crown as Britain’s largest mobile network. Meanwhile, BT has been haemorrhaging broadband customers amid aggressive discounting by “alt-net” rivals.</p><p>Its network division, Openreach, lost a further 242,000 customers in the second quarter.</p><p>Insiders say Kirkby celebrated when BT’s market value overtook Vodafone’s last summer. But Vodafone has once again leapfrogged its rival – its market capitalisation is almost £25bn, compared to BT’s £19bn – and the comparison is now less discussed.</p><p>BT’s shares are down around 9pc over the last six months, while Vodafone has rallied roughly 28pc as Margherita Della Valle’s turnaround plans pay off.</p><p>A source close to BT argued that the company was pursuing a long-term investment plan and that recent share price performance had been affected by UK issues such as Budget uncertainty.</p><p>One of Kirkby’s biggest tasks to date has been unwinding an attempt by her predecessors to ditch BT as the group’s flagship brand and replace it with the more dynamic EE. Yet this has sowed confusion in the market and within the company.</p><p>The pivot relies on the premise that Britons have affection for the BT brand – something one insider said had not been borne out by research.</p><p>To coincide with its 180th anniversary, BT is expected to launch a major brand refresh this year that will emphasise the company’s heritage and its key role in building Britain’s networks.</p><p>Bosses are also expected to stress BT’s sovereignty credentials, amid heightened geopolitical instability and growing concerns about data security.</p><p>But timing the refresh to coincide with the anniversary has allowed rivals to steal a march.</p><p>Insiders are furious that the newly merged VodafoneThree was able to adopt “The Nation’s Network” as its slogan, claiming a title that many within BT feel is its birthright. The advertising watchdog banned six Vodafone adverts in January that used this tagline after EE complained it was misleading.</p></div></div><div><div><p>There has been further confusion about BT’s approach to the discount end of the market. Executives are now considering the launch of a cheap mobile brand, despite recently ending its offer of mobile services under its cut-price Plusnet brand.</p><h2>Boardroom clear-out</h2><p>Meanwhile, morale among BT’s rank and file workers is in the doldrums. A recent survey by Prospect, one of BT’s largest unions, found that 95pc of respondents believed last year’s pay settlement was unfair, while more than three quarters reported having to sometimes or often carry out “pointless” tasks.</p><p>BT cited its own employee engagement survey that found 74pc of employees would recommend the company as a great place to work. Nevertheless,<strong> </strong>Prospect said it will be pushing for these grievances to be addressed as part of upcoming pay negotiations.</p><p>Up in the boardroom, Kirkby has overhauled her entire top team, bringing in new figures including Canadian telecoms executive Claire Gillies as consumer chief and former Deutsche Telekom bigwig Peter Leukert to oversee a much-needed IT overhaul.</p><p>Critics say the root-and-branch personnel changes have left the company with little senior UK experience, let alone people with knowledge of the company’s own systems and business.</p><p>Patricia Cobian, the incoming finance chief who was poached from rival Virgin Media O2 last year, is perhaps Kirkby’s most astute hire, though much of the Spanish executive’s time will be tied up in BT’s fiddly pension scheme.</p><h2>Investor pressure</h2><p>For her part, Kirkby will probably be most concerned about pressure from above. The arrival of Mittal on the share register has given her a major new force to contend with.</p></div></div><div><div><p>BT insists that Mittal, who controls the Bharti Global conglomerate, is supportive of its strategy. There is no doubt, however, that the tycoon is putting Kirkby’s performance under intense scrutiny.</p><p>Mittal is now BT’s largest shareholder with a stake of almost 25pc. In September, he tightened his grip on the company by taking a seat on the board.</p><p>The source familiar with Mittal’s thinking said he primarily wanted BT to take a more aggressive approach to issues such as updating the group’s ageing IT systems. But they added that recent broadband line losses had also rankled the Indian billionaire.</p><p>“There’s a commercial turnaround happening in this business but Bharti would like it to happen faster,” the source says. “Bharti’s way is always to move quickly.”</p><p>BT’s other major investors include Deutsche Telekom, whose boss Tim Höttges previously said buying a stake in BT was the “biggest mistake” he had ever made, and Mexican billionaire Carlos Slim.</p><p>Both Deutsche Telekom and Slim, who have a combined shareholding of just under 16pc, are thought to have swung in behind Mittal, creating a powerful shareholding block controlling just over a third of shares.</p><p>Kirkby retains the support of industry analysts, who argue that she has done well under challenging circumstances.</p><p>Karen Egan at Enders Analysis says: “She definitely did benefit from a timing perspective, coming in after Jansen left.</p><div><p>“But to her credit she told the story much better than he managed to.”</p><p>Matthew Howett, founder of Assembly Research, adds: “[BT is] a juggernaut that’s hard to turn round. It’s slow and you’ve got to make careful manoeuvres… There are a lot of stakeholders that need to be taken on board.”</p></div><p>Ultimately, though, it is investors and staff who Kirkby will need to win over.</p><p>“There’s just no story after two years,” says a senior industry figure. “The atmosphere inside is not good. People think it’s just endless cuts and stasis.”</p><p>A BT spokesman said: “No other FTSE 100 company is investing more into the UK than BT. As we deliver on our strategy, BT is building and connecting customers to the UK’s best fixed and mobile networks – and accelerating our transformation for customers, colleagues, owners and the country.”</p></div></div></div>

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<p>BT, under CEO Allison Kirkby, faces challenges despite a 70% share price rise since her tenure began. The company is losing broadband customers amid fierce competition from VodafoneThree and alt-net rivals. Kirkby is under pressure from major shareholder Sunil Bharti Mittal to define BT's identity and improve market share. Recent quarterly results will be critical, as revenue fell 3% and pre-tax profit dropped 11%. BT's market value has fallen behind Vodafone's, and a brand refresh is planned to coincide with its 180th anniversary.</p>

BT boss under pressure after ‘endless cuts’ and boardroom clear-out