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Eurobites: BT Calls in McKinsey to Stop the Rot

Also in today's EMEA regional roundup: Cattaneo considers his options; Etisalat doubles down on IoT; BT and KPMG on cybersecurity.

  • BT Group plc (NYSE: BT; London: BTA) has called in consultants McKinsey & Co. to help the UK incumbent stop the rot and revive fortunes hit by, among other things, a financial scandal at its Italian subsidiary. As the Daily Telegraph reports, it is thought that "Project Novator" may include a merger of BT's ailing Global Services unit with its business and public sector division. A separation of Global Services' UK arm from its overseas businesses is also under consideration, say the Telegraph's sources. In January, BT's share price plummeted more than 19% following the revelation that the irregularities at its Italian business would prompt a £530 million ($661 million) write-down. (See Dodgy Italian Job Savages BT Earnings, Share Price Tanks.)

  • Telecom Italia (TIM) CEO Flavio Cattaneo is reportedly in talks to leave the company following recent tensions with main shareholder Vivendi, according to Bloomberg. The charge, which the two companies deny, is that Cattaneo feels he can no longer run the company the way he wants to. (See Eurobites: Vivendi Tightens Its Grip on Telecom Italia.)

  • Middle Eastern operator Etisalat has committed to the Internet of Things with the commercial launch of NB-IoT and LTE-M services, Zawya reports. The operator has carried out IoT device testing with several vendors, including Huawei Technologies Co. Ltd and Qualcomm Inc. (Nasdaq: QCOM).

  • And speaking of the Chinese giant, Huawei has also been welcomed into the Commonwealth Telecommunications Organisation (CTO), an intergovernmental body. OK, hands up who knew that such an organization existed? For those wondering what the Commonwealth is, you can find out here and then wonder at the membership criteria of the CTO...

  • BT and consultancy KPMG have released a report, 'The cyber security journey – from denial to opportunity,' designed to provide practical guidance to companies wondering how to protect themselves in the 21st century. There's a lot that can be done, but simply throwing money at security technology and hoping that will keep cyber criminals at bay is not a good course of action, the partners advise. (See Cybersecurity: More a People Than a Tech Challenge? and BT, KPMG Highlight Cybersecurity Traps.)

  • Telekom Austria Group has told investors to expect more of the same, revenue-wise, in the second quarter, though the operator expects EBITDA to be higher, year-on-year, with strong performance in Bulgaria and Belarus boosting the numbers.

  • UK broadband provider TalkTalk is to replace its CFO later this year, the Financial Times reports (subscription required). Out will go Iain Torrens and in will come Kate Ferry, previously with Dixons Carphone and Merrill Lynch, among others. In February former CEO Dido Harding, who caught most of the flak associated with a major cyber attack that struck the company in the fall of 2015, was also replaced. (See Eurobites: TalkTalk Counts Cost of Cyber Attack.)

  • Denmark is rapidly becoming the European data center location of choice for the online giants. Apple Inc. (Nasdaq: AAPL) has announced it will build another data center in the country, its second in Denmark to be run entirely on renewable energy, as Reuters reports. In January, Facebook said it would build a facility in Denmark, its third outside the US.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

  • mendyk 7/11/2017 | 9:23:53 AM
    Re: Rotsa luck Indeed -- in my most memorable McKinsey moment, the experts spent about four weeks on "due diligence" and ended up recommending that management shed the majority of its business. Management did precisely that, which probably accelerated the demise of the company by a good half-decade. But think of all the money saved (aside from the seven-figure consulting bill).
    brooks7 7/10/2017 | 4:33:42 PM
    Re: Rotsa luck Dennis,

    It is pretty simple if you have been through those.  They run around asking senior employees what the gaps are and present a gap analysis for change.  The problem is that nothing really new comes out of those exercises.  On top of that the first person they interview is the guy in charge (who is paying their bill).  They parrot back that (and the lower level support for that) as the path forward. (Look how smart you are!)

    I see this all the time in my mgt consulting gigs.  What clients really want is for me to tell them they are on exactly the right path and have to change nothing and that results will suddenly improve.  They get uncomfortable when I don't do that.

    seven

     
    mendyk 7/10/2017 | 2:38:46 PM
    Rotsa luck I've worked for three different organizations that went the McKinsey "stop the rot" route. All three followed the rot-stopping prescription for change, and all three continued to rot.
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