Sunrise and CEO Swantee abruptly part ways

Sunrise has entered 2020 with the surprise announcement that Olaf Swantee, previously one of the favourites to take over the top-job at BT, will no-longer be CEO.

The abrupt nature of the announcement is of course not the usual course of action from a shift in management, though Swantee will remain in a support role until the Annual General Meeting in April. CFO André Krause has been promoted to CEO with immediate effect.

Details on the reason for a change in management are non-existent for the moment, though there will be plenty of rumours. Traditionally, telcos announce a CEO will be stepping down in ‘X’ number of months’ time, allowing a transition period through to a named replacement. Stating Swantee has resigned with immediate effect is unusual and suggests there is more to the story.

This is speculation however; there might not be a grand conspiracy theory, this might just be way the Swiss like to do business.

Swantee joined Sunrise in 2016 as CEO, having served as the CEO of EE in the UK for more than five years. His time at EE was a very successful one, taking over as CEO in the months following the formation of the company as a joint-venture between Deutsche Telekom and Orange. Over the course of the five-year period, Swantee oversaw the integration of the two existing businesses, as well as led EE to a leadership position in the UK market.

This success was then taken to Sunrise.

  2018 2019 2020 2021
Mobile subs 2.356 million 2.478 million 2.643 million 2.715 million
Growth 0.29% 5.2% 6.64% 2.72%
Market share 21.8% 23.5% 23.6% 23.8%
Broadband subs 457,000 500,879 461,860 461,660
Growth 8.38% 9.53% -7.79% -0.04%

Figures curtesy of Ovum’s World Information Series

Joining just after the company’s IPO in 2015, Swantee oversaw a transformation in the business, investing in the network while also shifting the brand and company culture. Mobile subscriptions are now on an upward trajectory, broadband is stabilising, and TV is in a healthy position. Sunrise is formulating a challenge to the clear and dominant market leader, Swisscom, and Swantee can leave with his reputation enhanced.

This is perhaps what makes the announcement somewhat of a surprising one; Sunrise are in a healthy position. A new strategy, focused on under-30s, is currently underway, while the business is also gaining traction in the enterprise market. Revenues are heading the right direction, as is share price and dividend payments.

What is worth noting is that there may well have been a bit of friction following the recently aborted acquisition of UPC Switzerland, Liberty Global’s assets in the country. Integrating UPC Switzerland into the Sunrise business would have given a boost to mobile subscriptions, but also a notable injection in the broadband unit; UPC Switzerland’s network currently passes 50% of the homes in the country.

Swantee was the champion of the $6.3 billion acquisition, a move which would have driven through a more complete convergence strategy in the business. However, the move was opposed by the telcos largest shareholder, Freenet, forcing the team to abandon the plans. Perhaps this friction could explain the sudden departure of a successful executive?

Whatever the explanation, Sunrise’s loss is someone else’s gain. Swantee is an experienced executive with a habit of being successful. We suspect that Swantee will not be unemployed for long.

Former Orange CEO jailed over workers’ suicides

French telco Orange has been found guilty of ‘moral harassment’ by a French court, with former CEO Didier Lombard facing a suspended jail sentence.

As the punishment is below two years, and Lombard is not considered a threat to the general public, no time behind bars will actually be served, though the ruling could prompt a significant shake-up for workers rights across the country. Lombard has also been fined €15,000, while Orange has been fined €75,000.

According to Reuters, the courts decided the corporate culture of overworking employees at Orange during the period was a direct contributor to the spate of suicides.

What is worth noting is that while it has been a decade since the accusations were directed towards Orange, the company has undertaken several transformation projects to ensure the same cannot happen again.

Orange has said it will not dispute the ruling from the court and has pointed to several initiatives to correct the toxic world culture which was in place at the time.

Earlier this year, the telco created a Compensation Commission to review individual situations, which resulted in the Evaluation and Compensation Committee which began operating in October. As a preventative measure, Orange has also said it has undertaken a vast social transformation project designed to prevent workplace suffering and psychosocial risks.

Legere is on the way out!

One of the most colourful, and successful characters in recent telco history is on his way out of T-Mobile US.

Few CEOs exit a telco with an enhanced reputation, but such is the success of T-Mobile US under his leadership, John Legere has almost completed an impossible to follow act. Perhaps this could be likened to the retirement of Manchester United Manager Sir Alex Ferguson or US tennis superstar Pete Sampras; how do you follow-up such impressive accomplishments?

Legere’s contract will expire on April 30, 2020, with current COO Mike Sievert taking over as CEO. Legere will remain as a board member of the company, tasked with overseeing the transition of the business as Sprint and T-Mobile US merge into a single entity. His future has not been confirmed just yet, though rumours emerged last week he was being groomed for the top-job at shared-workspace giant WeWork.

“John Legere has had an enormously successful run as CEO,” said Tim Höttges, CEO of parent company Deutsche Telekom.

“As the architect of the Un-carrier strategy and the company’s complete transformation, John has put T-Mobile US in an incredibly strong position. I have the highest respect for his performance as a manager and as a friend, I am very grateful to him for the time together.”

While Legere has formed a reputation as one of the more controversial and colourful characters in the US telco space, he should also be remembered as one of the most successful.

When Legere was appointed as CEO in September 2012, T-Mobile was not in an enviable position. Less than a year earlier, T-Mobile US looked like it would be merged into the AT&T business, only for the Department of Justice to step-in on the grounds of competition. At the end of 2012, T-Mobile US and MetroPCS Communications merged to create a consolidated fourth player with more spectrum, scale and investment potential. In 2013, Legere took control of the company’s fortunes with the launch of the ‘Uncarrier strategy’.

Over a six-year period, Legere’s magenta army have introduced numerous ‘Uncarrier’ offers which have proven to be highly disruptive to the US telco industry. For example, Uncarrier 4.0, known as Get Out of Jail Free Card, saw T-Mobile US pay the Early Termination Fees (ETF) of new subscribers, or Uncarrier 6.0 introduced zero-rating downloads for music streaming.

The result was relevance. T-Mobile US challenged the status quo, creating value for customers which rivals weren’t, eventually forcing the industry to evolve. When Legere was first appointed as CEO, T-Mobile US had roughly 33.3 million subscribers, now it commands 84.18 million. In 2012, revenues stood at $15.9 billion for the 12 months, in 2018, this number increased to $43.3 billion.

What will be interesting to see is whether Sievert can follow-up the wild-eyed persona which Legere has made his own. Sievert is a believer in the Uncarrier strategy, he led the marketing campaigns as CMO prior to his appointment as COO, though Legere was the face of T-Mobile US as well as the mastermind of the grand plan.

For example, looking at the social media presence of Legere, his Twitter account has 6.5 million followers, while a quirky Christmas themed message on YouTube in 2015 was viewed 226,266 times. The energetic CEO even fronted a series of cooking videos under the hashtag #slowcookersunday, the lasted video attracted more than 4.8 million watches on Facebook. Legere is the company’s most valuable brand ambassador, and few can replicate the enthusiasm and genuine belief in the message. What impact this will have on the appeal of the newly-merged business remains to be seen.

The future of the T-Mobile US business is at a pivotal point right now. Once the merger gets rolling it will have to convince Sprint’s current subscriber base to stay as a customer of the newly-merged telco, instead of churning to a rival. Churn is unavoidable in this scenario, therefore it will be a case of damage limitation. Unfortunately, the T-Mobile brand will not be able to rely on one of its most powerful marketing assets before too long.

The T-Mobile loss is a significant gain for WeWork, presuming the rumours are true. Though we would now like to point you to a collection of videos from the combative, colourful and cunning John Legere.

Could Orange’s CEO end up in prison?

Orange CEO Stephane Richard is widely respected throughout the telco industry, but he is also currently embroiled in a legal battle which could land him behind bars.

For his alleged role in the misuse of public funds while he was working for the Finance Ministry, French prosecutors have called for Richard to be sentenced to three years in jail. He would only spend half this time in prison, but this would be 18 months too long for almost everyone you ask.

The trial itself is drawing to a close, but this is hardly news, dating back to the 90s and the financial affairs of businessman Bernard Tapie. After making millions and eventually an 80% stake in German sports brand Adidas, Tapie faced debts and instructed state-owned Crédit Lyonnais to sell his stake. After the sale, Tapie was unable to settle said debts and challenged Crédit Lyonnais, suggesting the bank sold shares at a depressed rate.

This is where Richard steps into the fray. Tapie backed Nicolas Sarkozy in the presidential election, which he went onto win. After this victory, the Sarkozy Government set up an independent arbitration panel to settle the case between Tapie and Crédit Lyonnais, instead of challenging the legal case brought against the bank which was the previous rhetoric.

After Tapie was awarded €403 million by the panel, the French Finance Ministry came under extreme criticism. At this point, Richard was serving as Chief of Staff for Christine Lagarde, Finance Minister at the time and now the head of the International Monetary Fund.

The players in this game are accused of creating this panel, and the subsequent settlement, as a convert reward for the support Tapie gave Sarkozy during the election campaign. This is the gloomy side of politics which causes so many to groan at the moral fibre of today’s politicians; there is always someone to thank one way or another. Since this point, a Paris court annulled the panel’s decision and ordered Tapie to repay the funds.

It’s all very nefarious, grimy and complicated, however Richard is tied up due to his position and alleged action during the latter stages of the affair.

What is clear, however, is that Richard is potentially facing prison time for his role.

As we understand it, Richard’s team is confident he will not end up on the losing side, though there is always a chance one of Europe’s leading telcos could be thrown into disaster as its CEO is locked up. Aside from a prison sentence, prosecutors are also pursuing a €100,000 fine and a ban from working for any organization where the French Government has a stake for five years. Currently, the Government owns around 13% of Orange.

Orange has no comment on the saga at this point, as this is a personal issue for Richard not the telco’s business. However, we suspect there must have been some whispered conversations behind closed doors discussing contingency plans; it would be irresponsible of the Orange management team if they were not.

The trial will likely conclude this week, though this does not mean we will be any closer to a decision. Richard will be left on the edge of his seat for the next couple of months, with a decision expected after the summer.

Europe is losing in the race to secure digital riches – DT CEO

Despite politicians around the world declaring the importance of technology and insisting their nation is one of the world leaders in digital, Deutsche Telekom CEO Tim Hottges does not believe Europe is competing with the US and Asia.

This might seem like somewhat of a bold statement, but it is entirely true. The US, led by the internet players of Silicon Valley, have dominated the consumer technology world, while the China and Japan’s heavyweight industries have conquered the industrialised segments. Europe might have a few shining lights but is largely left to collect the scraps when the bigger boys are done feasting on the bonanza.

“Europe lost the first half of the digitalisation battle,” said Hottges, speaking at Orange’s Show Hello. “The second half of the battle is about data, the cloud and the AI-based services.”

In all fairness to the continent, there has been the odd glimmer of hope. Spotify emerged from Sweden, Google’s Deepmind was spun-out of Oxford University, while Nokia and Ericsson are reconfirming their place in the world. There is occasionally the odd suggestion Europe has the potential to offer something to the global technology conversation.

What has been achieved so far cannot be undone. The US and Asia are dominant in the technology world and Europe will have to accept its place in the pecking order. That said, lessons must be learnt to ensure the next wave of opportunity does not pass the continent by. A new world order is being written as we speak, and it is being written in binary.

If Europe is to generate momentum through the AI-orientated economy, it will have to bolster the workforce, create the right regulatory landscape (a common moan from the DT boss), but also make sure the raw materials are available. If data is cash, Europeans are paupers.

As it stands, less than 4% of the world’s data is stored in the European market, according to Hottges. This is the raw material required to create and train complex, AI-driven algorithms and business models. If European data is constantly being exported to other continents, other companies and economies will feel the benefits. More of an effort needs to be made to ensure the right conditions are in place to succeed.

Conveniently, the data collected through Orange’s and DT’s new smart speaker ecosystem will be retained within the borders of the European Union. There need to be more examples like this, forcing partners to comply with data residency requirements, as opposed to taking the easy route and whisking information off to far away corners of the world.

Another interesting statistic to consider is the number of qualified developers in Europe. Recent research from Atomico claims there are currently 5.7 million developers across the continent, up 200,000 over the last 12 months, compared to 4.4 million in the US. Everyone talks about the skills gap, though it seems Europe is in a better position than the US if you look at the number of professional developers alone.

Europe has lost the first skirmishes of the digital economy, and to be fair, the fight wasn’t even close. However, the cloud-oriented, intelligent world of tomorrow offers plenty more opportunities.

Telecom Italia kicks out CEO Amos Genish

In one of the least surprising board room purges ever, Telecom Italia (or TIM for short) has got rid of its CEO Amos Genish.

“TIM’s Board of Directors met today and deliberated by a majority vote to revoke with immediate effect all powers conferred to Director Amos Genish, giving mandate to the Chairman to resolve further obligations in relation to the existing working relationship with Genish,” said a TIM announcement today.

“In accordance with the succession plan for Executive Directors adopted by TIM, the proxies revoked to Director Amos Genish were provisionally assigned to the Chairman of the Board. The Chairman of the Nomination and Remuneration Committee has called for a meeting of the latter, in compliance with its responsibility in identifying the new CEO.

“A new meeting of the Board of Directors to appoint a new CEO was convened for November 18. The Board of Directors thanks Amos Genish for the work done in the interest of the Company and all its stakeholders in these fourteen months of intense activity.”

The removal of Genish had seemed inevitable since investor group Elliott won a battle with French conglomerate Vivendi, for control of the TIM board room, back in May of this year. Genish had previously been installed as CEO while Vivendi was still calling the shots, but after winning control Elliott made all the right noises about Genish having their full confidence.

This always seemed somewhat tenuous, with Genish’s loyalties presumably under suspicion and him providing at the very least a convenient scapegoat as and when things took a bad turn at the company. That came to pass last week when TIM said it was writing down the value of its assets by €2 billion and exacerbated by a disagreement between Genish and the board over what to do about TIM’s fixed line network.

Rumours emerged early this week that Genish’s days were numbered and that the board was about to convene a special meeting to agree on his demise. Hilariously TIM issued statements to the press denying such a thing was going to happen just a day or two before it did. TIM has a rich history of deceptive press communications but this outright lie was shameless even by its standards.

“This is a shock,” Analyst Paolo Pescatore of Midia Research told Telecoms.com. “However, ongoing turmoil at the company continues to drag it down. The company is very well placed given its assets and early move to secure a leadership position in 5G. Further tussles will hand its fierce rivals a competitive edge.”

So what next? Elliott apparently has less than a week to come up with an alternative CEO that will do its bidding and the remaining Vivendi board members will presumably oppose whoever they put forward. Above everything else, however, this is another opportunity to finally appoint a CEO whose first name is Tim. Surely everyone can agree on the importance of that.

BT rumoured to offer top job to Worldpay CEO

Following the exit of Baywatch lookalike Gavin Patterson, everyone has had a go at guessing who will be the next BT CEO. The wait may well be over with BT reportedly offering the job to Philip Jansen.

According to Bloomberg, BT have been in private discussions with Jansen for some time now, with the rumours of his ascension emerging in September. People familiar with the matter suggest an offer has been made, with BT potentially making the official announcement on November 1, alongside its financial results for Q3.

Irrelevant as to whether the rumours prove true, the new boss will have a tough job turning around a business which has faced several scandals over the last 12 months, profit warnings and a turbulent relationship with UK telco watchdog Ofcom. The team also need to fix a heavy pension deficit, while also finding additional funds to ensure both its broadband and mobile networks remain competitive. Over the last three years, share price has dropped roughly 59%, with it currently being the lowest for six years. Jansen might be heading into one of the toughest jobs in telco.

Adding to the rumours of the Jansen discussions is his resignation from Worldpay which was announced last month. Jansen will remain in the role until the end of the year, though the stars do seem to align.

While there have been several names thrown around, Jansen does make a compelling case. During his tenure, Jansen oversaw the $10.4 billion acquisition and merger of Worldpay rival Vantiv, adding a few interesting bullet points to his CV. With the EE purchase still to pay dividends, perhaps a fresh set of eyes, with experience in significant M&A is an attractive idea.

Informa CEO doesn’t seem to fancy the BT job

It has been reported that Informa CEO Stephen Carter has been approached by BT as part of its search to replace CEO Gavin Patterson.

Sky News got the scoop, reporting Carter ‎’has been sounded out in the last few weeks about the post.’ Carter hasn’t publicly commented on the matter but apparently one of his unnamed friends has, confirming the approach but stressing he is not a candidate for the BT CEO gig, nor is he any part of the recruitment process.

It seems more likely that a headhunter has been ringing around senior telecoms execs to gauge their interest in running BT and Carter was on their list. Somehow this process came to the attention of Sky News and here we are. Intriguingly Carter’s mystery mate, who we believe accurately represents his position, indicated to Sky that Carter could yet be persuaded to shift his current position on the vacancy.

Carter was always likely to be on any headhunter’s shortlist, as Telecoms.com and Light Reading (both of which are owned by Informa) have speculated previously. He has a strong telecoms background including NTL and Alcatel Lucent, as being the founding CEO of UK telecoms regulator Ofcom. But thanks to a recent M&A spending spree, including the £3.9 billion acquisition of UBM, there seems to be plenty to hold Carter’s attention at Informa right now.

The smart money is on EE boss Marc Allera to move up to the BT CEO role. The acquisition of EE at the start of 2016 has served to illustrate how behind the times the core BT business is. Allera has shown he gets the modern consumer telecoms game and is already part of the mix so he would seem to be the safe choice. Besides, apparent shopaholic Carter is unlikely to be interested in a company that has already blown its M&A budget for the next few years.

Finance man takes the helm at Intel after Krzanich ‘resignation’

After Brian Krzanich handed in his notice of resignation, Intel has announced Bob Swan will step out of the accountants office and will lead the company as Interim CEO.

An ongoing investigation by internal and external counsel has confirmed a violation of Intel’s non-fraternization policy, after it emerged Krzanich had a past consensual relationship with an Intel employee, though details on the saga are relatively thin for the moment. The search for the next CEO is underway, though with the 5G dawn beginning to emerge, appointing the right person to head the technology ambitions of the company is critical.

“The board believes strongly in Intel’s strategy and we are confident in Bob Swan’s ability to lead the company as we conduct a robust search for our next CEO,” Intel said in a statement. “Bob has been instrumental to the development and execution of Intel’s strategy, and we know the company will continue to smoothly execute. We appreciate Brian’s many contributions to Intel.”

What this means for the business is anyone’s guess, with future fortunes riding on the appointment of the next permanent CEO. Under Krzanich’s leadership, Intel’s share price has risen roughly 160%, while revenues have grown from roughly $52.7 billion across 2013 to $62.7 billion in 2017. The growing influence of cloud on the technology world could be seen as one of the accelerators to Intel’s success, it still is the leader in the market with its data-centre focused unit, though the importance of having an engineer in charge should not be overlooked. Despite challengers Intel is the leader in the data-centre market, it is now making positive moves with artificial intelligence and also more long-term bets such as autonomous vehicles.

Krzanich joined the business as a Process Engineer at Intel’s chip factory in New Mexico in 1982, before supervising assembly and testing facilities, and holding management roles within Intel’s manufacturing division. Krzanich progressed to become COO, leading Intel’s China strategy, before being appointed CEO in 2013. His experience is largely focused on engineering, research and operations, which we believe says a lot about Intel’s success over the last few years.

The culture of a business, as well as the operational progress is defined by senior managers. Krzanich is from an engineering and operational background, while under his leadership, Intel has positioned itself as a leader in the 5G race. By way of comparison, Apple in recent years has looked considerably less innovative and more like a well-oiled machine since the death of Steve Jobs and the appointment of supply-chain guru Tim Cook. BT is another example with Gavin Patterson, a marketer who lead the business down the ‘bells and whistles’ route of content and value adds as opposed to creating an excellent customer experience with investments into the network.

There is not necessarily a right or a wrong way to go about defining the leadership and culture of a business, but it has to be relevant to the ambitions of the company. Intel wants to position itself as a leader in the 5G world, therefore ambitions should be geared towards R&D, as well as collaborating with the best and brightest in the technology industry. There is still a lot of work to be done on the technology side of 5G, therefore the next appointment should be cut from the same cloth as Krzanich, someone who will want to spend money on R&D and building the best technology on offer.

Finance man Swan is a perfectly adequate appointment for the moment, he knows and would have helped build the Intel strategy, but a new CEO needs to be found sooner rather than later. And it needs to be someone from a technology background who can further the Intel roadmap to ensure the technology doesn’t fall into the realms of mediocrity; penny pinching and operational efficiency should not be top priorities right now.