Ben Verwaayen, the man credited with turning around BT, surprised the City yesterday by announcing he is to step down as chief executive at the end of next month. The Dutchman, recruited six years ago to pick up the pieces at the beleaguered telecoms giant, is handing over to Ian Livingston, head of the retail division.

Gavin Patterson, managing director of BT’s consumer division, will take Mr Livingston’s job in BT Retail and join the main board in a move that it is hoped will caused minimal disruption.

Mr Verwaayen, with Sir Christopher Bland, the past chairman, is credited with transforming BT from a troubled company struggling under debt of £30 billion into an IT powerhouse. The pair resolved the crisis with a rights issue and by spinning off BT’s mobile phone operations. They also saw off threats from Ofcom, the regulator, which had threatened the wholesale break-up of the former monopoly.

Mr Verwaayen is thought to be leaving BT with £5 million. Under his contract he was promised £700,000 on its termination and he is also eligible for a bonus for the period of April 1 to June 30, which is likely to be up to £300,000. He will also receive shares already earned as a deferred bonus during the past three financial years and worth about £4 million.

Mr Verwaayen started BT’s global IT business and took the group to the top of the list of UK broadband providers. It now has 4.3 million customers. He is seen as a father of British broadband, helping to create one of the world’s most competitive markets. In 2002 the UK had 200,000 broadband subscribers; there are now 12.5 million.

Mr Verwaayen’s departure was not unexpected in itself, but analysts had begun to think that he might stay on until next year to address BT’s recently disappointing share price performance.

BT shares have fallen sharply since half-year results in November. These, and third-quarter figures last month, highlighted the degree to which the wholesale division’s revenue has fallen.

Mr Verwaayen, 56, described his time at BT’s helm as “the best six years of my career”. He added: “I have been very clear from day one that effective leadership has a limited shelf time. There is inevitably a point where you have to think what your mind says and what your heart says. My heart says for the company I have not lost any of the passion that I have for the people and the business, but my mind says it is the right time.”

Mr Livingston, 43, had been seen for some time as the likely successor. His path was cleared for BT’s top job last October after his main internal rival, Andy Green, BT’s head of strategy, left to be chief executive of LogicaCMG, the computer services group.

Mr Livingston yesterday said that under his managment BT would consider strengthening its presence in the mobile phone sector — arguably an area of strategic weakness for the company.

He added that BT is looking at investing in WiMax, the mobile technology that claims to provide super-fast, low-cost connections to the internet.

Ringing the changes

Ben Verwaayen, In his six years at BT’s helm, has shown relentless energy, leading the group to the top of the broadband market and turning around its financial fortunes. It should come as no surprise when he says it is highly unlikely he will be content to sit back and relax on boards of various companies once he steps down at the end of May.

For the time being, he is not giving away his plans. except to say he will have more time to watch his favourite football team, Arsenal.

Mr Verwaayen has ruled out another role in telecoms or politics, although it has been thought that he might take on an environmental role. In 2006 he chaired a CBI taskforce on climate change, leading a group of chief execu tives from some of the UK’s biggest companies. A Dutch national, Mr Verwaayen graduated with a masters degree in law and international politics from the State University of Utrecht, Holland.

Before taking up his post in BT, he spent four years with Lucent Technologies in the US, where he became vice-chairman of the management board, having been executive vice-president and chief operating officer.

Prior to Lucent, Mr Verwaayen was with Koninklijke PTT Nederland (KPN). From 1988 to 1997, he was president and managing director of KPN’s PTT Telecom.

Asked what his BT legacy might be, he said: “My biggest joy is people coming in the building today are proud to work in BT. When I came here six-and-a-half years ago, people felt miserable and did not want to talk about that they worked at BT with their neighbours.” (Lilly Peel)

Ian Livingston will become BT’s chief executive at the relatively young age of 43. The Scotsman has a history of being a step ahead of his peers – at just 19, he graduated from Manchester University with a degree in economics before going on to qualify as a chartered accountant.

At Dixons he was appointed group finance director at 32, making him the youngest FTSE 100 director by some way.

He was not the only star at Dixons. Yesterday’s promotion has made him the third member of Dixons’s finance department to become chief executive of a major telecoms company; his former colleagues John Pluthero and Jeremy Darroch head Cable & Wireless and BSkyB, respectively.

When asked what the secret was, he said: “They gave us a chance to show what we could do at a young age and gave us jobs that were bizarre.”

This included making him a chief financial officer of Dixons’s $1 billion US subsidiary at 28.

Mr Livingston, considered a straight-talker and said to have a sharp wit, joined BT four months after Ben Verwaayen took over as group chief executive.

Within his first three years, the Glaswegian improved operating cashflow from £88 million in the red to £2.1 billion and reduced debt by £6 billion.

Mr Livingston is a popular choice in the financial community to head BT because he has continued to prove his worth. Since 2005, as head of retail, he has overseen the division’s profits go from an annual double-digit rate of decline into double-digit growth, with annual profits of around £1.5 billion.

He is a keen football fan, and a director of Celtic. (Lilly Peel)

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