BT has confirmed that Danon will leave early next year, thought to be March 1. Publicly, BT is stating that Danon has been offered a far more lucrative package at Capgemini, where he will be responsible for all operational activities covering 60,000 staff worldwide. However, BT has again been forced to deny reports of a disagreement between Danon and CEO Ben Verwaayen.
In an effort to scotch these rumors, Verwaayen paid fulsome tribute to Danon: Pierre has done a superb job at BT Retail and he will make an outstanding contribution as COO at Capgemini, a company which we partner and admire. I would like to pay tribute to Pierre’s winning spirit, and to thank him for the part he has played in building an exciting future for BT.
The chairman of BT, Sir Christopher Bland, added: Pierre has made a tremendous contribution to the transformation of BT. His energy and customer focus has been much valued during the past four years. He has now been offered a major new challenge and we all wish him well.
Commenting on his new appointment, Danon said: I am thrilled by the scale of the new opportunity offered to me by Capgemini, and proud of the work completed by the BT Retail team. BT faces an exciting and successful future. I am pleased to have played my part in the transformation of the company that is being led by Sir Christopher Bland, Ben Verwaayen and the rest of the Board. I have every faith in BT’s strategy and am confident that it will continue to deliver for BT’s customers, shareholders and staff.
Yet behind the statements, there have been reports of serious disagreements with Danon reportedly clashing with Verwaayen over broadband pricing strategies and allowing BT Retail to invest in its own local-loop unbundling. Danon was reportedly tired of trying to compete with residential broadband suppliers taking advantage of regulatory reform to undercut BT broadband prices.
At that time Danon revealed he was considering using and investing in the cheaper alternative offered by local loop unbundling in order to cut costs. BT Retail is by far the biggest customer of its wholesale arm, and moving to LLU would seriously damage revenues at BT Wholesale.
A week later at a press conference to reveal its interim results, ComputerWire observed many of these tensions first hand. Despite BT chairman Bland insisting that no boardroom bust-up had taken place, tensions were still clearly visible, especially from Danon.
At one stage during Verwaayen’s speech, Danon looked away in disgust when his boss talked about BT Retail needing a level playing field to compete, and there was no case of BT against BT. A clearly tetchy Danon was also defensive during a question-and-answer session.
Danon joined the former UK incumbent in October 2000 as chief executive of BT Retail, and was appointed to the BT board in November 2001. Danon was seen as a breath of fresh air, and indeed was once tipped at a future CEO of the group as a whole.
At that time, BT was an organization crippled with debt and poor management and when the old guard was swept away, Danon surprised many when he made it clear that BT was breaking with the past.
Notably, his barbed comments were remarkably critical of the old regime, namely chief executive Peter Bonfield, who stepped down in January 2002.
Bonfield was a strong admirer of Japanese culture, and Danon could not resist saying publicly that BT was changing from a ponderous Sumo wrestler into a lean and agile Samurai swordsman. Twisting the knife, Danon added: By making this change, BT will finally break its losing streak.
During his time at BT, Danon was generally considered to be instrumental in driving through innovation and taking BT back into the mobile market. Under his leadership, BT Retail enjoyed a significant increase in profits and cash flow, and he also trimmed costs by GBP800 million ($1.51 billion), and built a strong management team.
