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Wednesday, 31 October, 2001, 16:06 GMT
Who's next for BT's hot seat?
Sir Peter Bonfield
Being chief executive of British Telecom is one of the most high-profile - and toughest - jobs in British business.

In the running?
External candidates
Tony Ball, BSkyB
Gerry Murphy, Carlton
Graham Wallace, C&W

Internal candidates

Pierre Danon, retail chief
Paul Reynolds, wholesale chief
Philip Hampton, finance director
But there will be no shortage of candidates to replace Sir Peter Bonfield when he leaves the company in January.

Sources say that the lack of a named successor to Sir Peter suggests that BT might be looking for someone from outside the business.

According to the Financial Times newspaper, at least one external candidate has already been approached.

Television experience

It names Tony Ball, executive director of satellite broadcaster BSkyB, who has also been linked with the vacant chief executive post at Channel 4, as a possible contender.

There is a tendency for the BT board to all have knighthoods and, in the past, they have confined their search for new blood to the grandees of British business

Eric Paulak, research director, Gartner

BT has reportedly been mulling a link-up with BSkyB to provide cable television services.

The telecoms giant is keen to gain a foothold in the television market, giving Mr Ball an inside track.

Carlton Communications boss Gerry Murphy has also been linked to the BT job.


Three strong internal candidates are also believed to be in the running.

Pierre Danon, chief executive of BT's retail division, is tipped by some as favourite to succeed Sir Peter.

If you look at why Peter Bonfield is leaving early, it is because he has pretty much messed up everything he has touched over the past six years

Eric Paulak

One of the few French business leaders to successfully cross the divide to Anglo-Saxon business culture, Mr Danon made his name at US copier giant Xerox, where he rose to be head of its European operations.

He joined BT in September 2000 as the first head of its UK retail division.

At Xerox, Mr Danon gained a reputation for innovative thinking and was reportedly not afraid to make changes.

However, the the 44-year-old Frenchman appeared to rule himself out of the running in a newspaper interview earlier this month.

"I have no interest in being the next chief executive of BT," he was quoted as saying.

Strong contender

Head of BT wholesale Paul Reynolds is also tipped as a possible candidate.

Dr Reynolds, who gained a PhD from London University after graduating from Strathclyde University, has been with BT since 1983, rising through the ranks in the customer service department in Scotland.

In the early 1990s, he was put in charge of the chairman's office, before spearheading BT's entry into multimedia.

Former British Gas finance boss Philip Hampton, who joined BT last year as group finance chief, is also a strong contender.

Mr Hampton, a former executive director at investment bank Lazard Brothers, masterminded the splitting of British Gas in two and has been closely involved in the demerger of BT's mobile unit MMO2.

Whoever gets the job will need a strong personality to stand up to BT chairman Sir Christopher Bland, who arrived from the BBC earlier this year, analysts have commented.

Bland has said he wants a new chief executive in place before Bonfield leaves.

Look beyond BT

Eric Paulak, head of research at telecoms analysts Gartner, said BT should look for an external candidate with a good track record in telecoms.

"If you look at why Peter Bonfield is leaving early, it is because he has pretty much messed up everything he has touched over the past six years," Mr Paulak told BBC News Online.

"The decisions both he and Iain Vallance made demonstrated that they had no idea how to run a telecom business."

Mr Paulak also urged BT to look beyond internal candidates such as Mr Danon or Dr Reynolds, "who have been tutored by Sir Peter Bonfield".

"I think it would be best for the company if they looked beyond British business," he added.

"BT has become a bit of an institution and they have been hampered by that.

"There is a tendency for the BT board to all have knighthoods and, in the past, they have confined their search for new blood to the grandees of British business."

Choosing a successor for Sir Peter from the world of television would also be a mistake, Mr Paulak said, as it would signal a move towards broadcasting which has proved potentially ruinous for other telecoms operators.

Huge responsibility

He suggested BT take a close look at the boardrooms of Vodafone, Orange, Cable & Wireless or even France Telecom in its search for a new chief executive, or poach someone from one of the smaller US fixed line operators.

Whoever is chosen will face the huge responsibility of lifting BT's share price off the floor by further reducing its debt, a job barely begun by Sir Peter.

"Bonfield has prepared BT for a period of transition, but the transition itself has yet to come," Mr Paulak added.

Graham Wallace, chief executive of Cable & Wireless, has been suggested as a suitable telecoms candidate from outside BT, although potential conflicts of interest may rule such a move out.

See also:

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26 Apr 01 | Business
Vallance resigns from BT
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BT hires demerger specialist
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BT chief 'to quit early'
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