BT's share price has increased by 80% since Allison Kirkby took over as chief executive more than two years ago, reaching £5.6 million in remuneration last year - the highest for a BT boss in over a decade. This significant growth is underpinned by the company's efforts to address operational challenges and solidify its position in the UK market.
One of the key developments under Kirkby's leadership has been the resolution of issues surrounding BT's international division, which had been a financial drain for years. This move is part of a broader strategy to reposition BT as a 'national champion' and refocus on its core domestic operations. The international division's struggles date back to a scandal at BT Italia nearly a decade ago, which significantly impacted the company's market value and led to a change in leadership.
Furthermore, BT is nearing completion of substantial investments in full-fibre broadband infrastructure across the UK. With over two-thirds of the nation now covered by full-fibre, the company anticipates generating an estimated £3 billion in annual free cashflow by the end of the decade. This improved financial outlook is also supported by plans to streamline operations, including a projected 40% reduction in its workforce to approximately 75,000 by 2030, partly through increased use of artificial intelligence. Kirkby recently increased the company's savings target from £3 billion to £3.7 billion, underscoring a commitment to efficiency.
However, some industry observers suggest that the groundwork for many of these improvements was laid by Kirkby's predecessor, Philip Jansen. Jansen's tenure saw significant strategic decisions, including a rare dividend cut to fund infrastructure upgrades, major cost reductions, and the divestment of the BT Sport pay-TV business. Despite inheriting a strong foundation, Kirkby is credited by former executives with being a 'driving force' who made 'smart subsequent decisions', navigating the company through continued challenges.
The competitive landscape remains intense for BT. The company faces a revitalised Vodafone, which has surpassed EE as the UK's largest mobile operator and seen its market value surge by a quarter over the last year. In contrast, BT reported a 3% decline in total revenues last year, and its shares have fallen more than 3% over the same period. A recent decision to reinstate BT as its flagship consumer brand has created some market confusion, though branding experts suggest the rationale aims to leverage BT's strong emotional connection with consumers for all connectivity services.