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.

Page and Brin officially step away from Google management

Google co-founders Larry Page and Sergey Brin have announced they will step-back from their management roles at Alphabet, handing the reigns over to current Google CEO Sundar Pichai.

This is a major moment for the technology world, as two of the most influential figures officially put one foot into the retirement. Page and Brin will continue as board members at Alphabet, though operational control of the group, as well as the core Google business and the investment unit, Other Bets, fall under Pichai’s remit.

In a letter on the Google blog, Page and Brin liken Google to a developing youth. Now at the age 21, the duo have to let go and let Google flourish, with the letter suggesting the pair have taken the company as far as they can, and new leadership is needed.

“We’ve never been ones to hold on to management roles when we think there’s a better way to run the company. And Alphabet and Google no longer need two CEOs and a President,” the letter states.

“Going forward, Sundar will be the CEO of both Google and Alphabet. He will be the executive responsible and accountable for leading Google and managing Alphabet’s investment in our portfolio of Other Bets. We are deeply committed to Google and Alphabet for the long term, and will remain actively involved as Board members, shareholders and co-founders.”

The change to the management structure is immediate.

In fairness to Page and Brin, they arguably have earned a rest. With Google now 21 years old it is now easy to underestimate the remarkable impact this pair have had on the world. And it all started with such a simple idea; search engines are rubbish, we can do it better.

This is why Google is such an influential company and will continue to be even more influential in the future. It invests very intelligently to create products which are best-in-breed. The Google search engine started it all, before the Android acquisition allowed the team to dominate mobile.

Moving forward, the team is making significant investments to gain influence in the smart home, consumer IOT and connected car ecosystems. The smart bet is that it will succeed. This is the beauty of the Google business model and investment strategy; its simplicity. Google is not venturing too far, it is attempting to apply its search and assistance expertise to different environments. Google started on desktop computers, then it moved to mobile and into the living room. Soon enough it will be in our cars and on our wrists.

Pichai has already proved he is a very capable businessman and leader, so its time for Page and Brin to put their feet-up and enjoy the California sun, assuming they have the factor 80 on hand.

UK telecoms poster boy runs out of lives

BT CEO Gavin Patterson will step down from the top job after a turbulent couple of years, with no-nonsense Chairman Jan du Plessis on the search for a replacement.

Patterson will stay in place until a suitable replacement has been found, which is expected to be in the second half of the year, though the statement put forward by BT highlights his position had now become unattainable. Despite putting forward an aggressive restructuring strategy and multi-play plan in recent weeks, reports emerged earlier this week du Plessis was under pressure from investors to make a change at the top. Patterson has been on thin ice for quite some time, and now it has cracked.

“Gavin has been with BT for just over 14 years and I want to thank him for his contribution to our business during that time, in particular during the almost five years that he has served as Chief Executive,” said du Plessis. “The Board is fully supportive of the strategy recently set out by Gavin and his team. The broader reaction to our recent results announcement has though demonstrated to Gavin and me that there is a need for a change of leadership to deliver this strategy.”

Despite a last throw of the dice from Patterson and his team over the last couple of weeks, the writing on the wall was starting to become much more legible. To say Patterson had overseen a blustery couple of years in the BT business would be one of the understatements of 2018, and there has been a feeling it was only a matter of time before a change at the top was announced. We expected Patterson might have been given another quarter to ensure du Plessis had all the ammunition needed to make the decision, but the decisiveness of the South African with a tough reputation is clearly evident here.

The recent sacking of 13,000 employees was possibly the culmination of several disasters over the last two years which ranged from accountancy scandals in Italy, to billions being spent on sports rights with little reward, a massive pensions deficit and finally a dysfunction relationship with Ofcom, which resulted in a costly and slightly humiliating legal separation of the Openreach business. The business has seemingly constantly under pressure, which is expected for a former monopoly, which owns a wholesale fixed business and is the national incumbent, but many would have expected the management team to create a more hospitable relationship with the regulator.

Patterson might have been a charismatic leader and an effective spokesperson for BT, but the inadequacies of the business under his management cannot be ignored. The BT share price is at its lowest point for six years, the integration of EE has shown little reward to date, while revenue has continued to decline. There was little alternative but to seek new guidance.

Some might suggest there are few others who could have prevented BT heading down this stormy road, perhaps indicated Patterson is a bit of a scapegoat for a business which is fundamentally inadequate for the digital economy, but life at the top is tough. If BT was on the opposite side of the performance spectrum, Patterson would be collecting the rewards; unfortunately he now has to take responsibility for the failures.