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

Core Viewpoint - Kirkby's leadership at BT has been characterized by a strategic confirmation of existing plans rather than introducing a new ambitious approach, coinciding with a peak in investment in full-fibre broadband that allows for cost reductions and increased shareholder returns [1][2]. Company Strategy and Performance - Under Kirkby's leadership, BT has reduced its broadband network investment by £3 billion, which has been positively received by investors, leading to a significant rise in share price [2]. - Despite the positive market response, BT is losing market share in key segments, with a noted decline in broadband customers and a need for a clear growth strategy [4][5]. - BT's revenue fell by 3% to £9.8 billion in the first half of the financial year, attributed to lower demand for handsets and competitive pricing pressures, while pre-tax profit decreased by 11% [9]. Competitive Landscape - BT faces intense competition from new mobile operators like VodafoneThree and aggressive "alt-net" broadband rivals, which have contributed to customer losses [6][10]. - The merger of Vodafone and Three has resulted in BT's EE losing its status as the largest mobile network in the UK, further complicating its competitive position [10]. Shareholder Dynamics - Sunil Bharti Mittal, BT's largest shareholder with a stake of nearly 25%, has increased pressure on Kirkby to adopt a more aggressive strategy, particularly regarding IT system updates and addressing broadband line losses [22][23]. - Major shareholders, including Deutsche Telekom and Carlos Slim, are reportedly aligning with Mittal, intensifying the scrutiny on Kirkby's performance [24]. Organizational Changes - Kirkby has implemented significant personnel changes, including a complete overhaul of the top management team, which has raised concerns about the lack of senior UK experience within the company [19][20]. - Employee morale appears low, with a survey indicating that 95% of respondents felt last year's pay settlement was unfair, highlighting potential internal challenges [18]. Brand and Market Positioning - BT is planning a major brand refresh to coincide with its 180th anniversary, aiming to emphasize its heritage and role in building Britain's networks, although timing issues have allowed competitors to gain an advantage [13][14]. - There is ongoing confusion regarding BT's market approach, particularly in the discount segment, as executives consider launching a new low-cost mobile brand despite recent changes in strategy [17].