Carlos Slim reduces stake in operator as BT Group reports falling sales, except in Consumer services, but better margins
In her continuing effort to strengthen BT Group's operational performance, CEO Allison Kirkby has selected Jon James to lead BT Business, marking another instance of her recruiting from her prior professional network. BT Business itself emerged in early 2023 through a merger of the UK enterprise services division and BT Global, both of which have faced prolonged difficulties.
James previously served as chief executive of Denmark's Nuuday, which Kirkby established when she was running TDC, Denmark's national carrier. At that time, Kirkby separated the company's infrastructure operations (TDCNet) and service delivery (Nuuday) into independent entities to unlock additional shareholder value. James assumed his position at Nuuday in 2021, where he characterized himself as the "IT dragon slayer" for his success in modernizing systems built on legacy mainframe technology.
Taking office on 3 March, James succeeds Bas Burger, who has overseen BT Global since 2017 (previously known as BT Global Services). Rather than departing entirely, Burger will redirect his efforts toward optimizing BT's international operations and evaluating potential partnerships or sales for the division. Kirkby has consistently emphasized her intention to concentrate the company's activities on the UK market since assuming the top role early last year.
The international segment includes BT's Global Fabric infrastructure platform, which Kirkby considers both a financial burden and a strategic distraction. According to a BT statement, Burger will focus on "the optimisation of BT's international operations and explore options for the unit."
Kirkby commented, "Jon's considerable experience from the UK and European telecoms markets, together with his track record in leading businesses through transformation, will be hugely valuable as we fully focus BT Business on the UK".
Prior to Nuuday, James held senior management roles at Tele2 Netherlands, Swedish cable operator Com Hem, and Virgin Media in the United Kingdom.
James stated, "BT Business has an unbeatable combination of deep customer relationships and world-class technology expertise, and I am looking forward to working with Allison, Bas and the BT Business team as we build an even stronger asset for our customers, our shareholders and for the UK."
Since taking the helm at BT Group, Kirkby has assembled a team of trusted associates. Tom Meakin, a former McKinsey partner with whom she previously collaborated, joined the board in April 2024 in a strategic advisory capacity before being formally named Chief Strategy and Change Officer in September. That same month, Harmeen Mehta, who held the title of Chief Digital and Innovation Officer, departed. Mehta had arrived in January 2021 with considerable fanfare and promises of technology-driven transformation, having previously worked at Bharti Airtel.
Marc Allera, who leads the Consumer division, announced his departure in November 2024. Claire Gillies will assume the role beginning 1 April.
The incoming executives face substantial headwinds. BT disclosed its third-quarter results on 30 January, revealing that total revenues declined 3% year-on-year during the quarter ending in December, reaching £5.18 billion. The company attributed this contraction to "continued challenging non-UK trading conditions" and reduced handset sales.
BT Business specifically saw revenues drop 2% to £1.98 billion, a figure that encompasses inter-company sales. Across the first nine months of the financial year, BT Business revenues have contracted 5% compared with the prior year, totaling £5.85 billion.
The Consumer segment, which is substantially larger, also experienced revenue erosion over the first three quarters, declining 2% due to lower phone sales, though service revenues rebounded in the third quarter.
Despite revenue pressures across the business, BT Group achieved slight margin expansion through cost discipline, a central pillar of Kirkby's transformation agenda. Adjusted EBITDA reached £2.1 billion, representing a 4% increase year-on-year.
Kirkby elaborated: "Our ongoing modernisation continues at pace, delivering a further step-up in fibre build and take-up, customer satisfaction and EBITDA. Benefits from our cost transformation more than offset lower revenue outside the UK and weak handset sales.
"Openreach again performed strongly with the highest ever full fibre build, passing more than 1 million premises for the fourth consecutive quarter, and connecting a new record of nearly half a million customers. Consumer returned to service revenue growth and continued to expand its full fibre and 5G customer bases. In Business, our core UK channels were stable. Cost transformation remains firmly on track, with excellent progress on both energy costs and productivity in the quarter.
"We continue to make progress towards becoming fully focused on the UK, with the sale of our data centre business in Ireland. I am also very pleased to welcome Jon James to BT's Executive Committee as the new CEO of a UK-centric BT Business, effective early March. This appointment enables Bas Burger to dedicate his time to the optimisation of our international business segment, which is progressing to plan.
"BT's continued delivery means we remain on track to deliver our financial outlook for this year and our cash flow inflection to c.£2.0bn in 2027 and c£3.0bn by the end of the decade."
In a separate development, Mexican billionaire Carlos Slim has trimmed his stake in BT Group, reducing his holding from 4.31% to 4.24%, marking his first divestment since initially investing in the operator in June 2023. Slim had progressively increased his position through multiple transactions since that initial investment, a move widely interpreted by investors as validation of Kirkby's strategic direction.
The rationale behind Slim's share disposal remains undisclosed.
