Ovum comment: Paul Reynolds leaves BT

BT announced today that Paul Reynolds, CEO BT Wholesale (BTW), is to leave the company in September to become CEO of Telecom New Zealand (TNZ). Ovum were first asked to comment on this story two weeks ago when rumours of this first emerged. We declined to do so preferring to comment on fact rather than rumour, and out of respect for Paul as an individual. We don't think it appropriate to speculate on what an individual does or does not choose to do.

Ovum principal analyst Mike Cansfield comments

We think it best to look at this in three parts - his legacy to BT, why he is leaving, and his inheritance at TNZ.

Looking at BT his legacy, we have been very impressed by the way Paul led BTW through both the recession and the renaissance of wholesale as a function in the industry, and how he led the modernisation of the business in BT from a backwater to a leading innovation centre. Both achievements are considerable, and his departure is a big loss to BT.

So why is he leaving. There will be speculation that his departure is due to pique because the network and 21CN (something he has always championed) has been taken out of Wholesale and put in the new Transformation unit under Andy Green (see also EuroView daily, 25th May 2007).

Having known Paul for almost 20 years, I doubt this. I expect he took the decision because now Wholesale is on a new footing, and 21CN is well into implementation stage, so now was the right time to let go. Given the fulsome tributes made to Paul by CEO Ben Verwaayen and Chairman Sir Christopher Bland this implies amicable rather than acrimoniyous parting of the ways, so we suspect this is the real reason.

Looking at TNZ, his inheritance faces plenty of big challenges - a slow roll-out of broadband (sounds familiar !), ongoing regulatory issues, and fierce competition from Vodafone to name but three. Add on to this the topological challenges of both islands, and a small but dispersed population and the complexities are magnified even more. Leading TNZ will be no holiday.

But in addition to network/wholesale, Paul also brings operational experience (from his spell in his native Scotland - a country with similar challenges to New Zealand) and product management skills to TNZ. All-in-all this makes him eminently suitable for his new job.  His appointment is a good fit for both parties.

Mike Cansfield is Telecoms Strategy Practice Leader with 19 years' experience in the industry

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