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Roast beef and Champagne: Old-school BT heads for turnaround as suave billionaire becomes biggest shareholder

Andrew Saks, Friday, 11 June 2021

BT, an abbreviation so ancient that most under the age of 30 do not remember the days when the largest telecommunications provider in Britain which was once the only one in the country was represented by actual words.

It stands for British Telecommunications; however, it is not as British as it once was, especially after today's announcement that a flamboyant and famous multi-billionaire from the other side of the English Channel has become the firm's largest shareholder.

BT was founded some 17 years ago as the Electric Telegraph Company, shortly after the invention of the telephone by Scottish genius Alexander Graham Bell, and in 1868 control was passed to the newly formed GPO (General Post Office)'s Postal Telegraphs Department.

BT, therefore, is as British as roast beef and Yorkshire pudding and has a long and illustrious history as a traditional institution as well as an innovator of domestic and enterprise technology.

Its plodding, government-owned background still defines its image, despite having been a publicly listed, shareholder owned company since 1984, and an old-fashioned yet wholesome reputation has hovered over it for generations, amplified in the 1980s and 1990s by its advertising campaigns featuring comedian and actress Maureen Lipman as "Beattie".

Now, however some flair has been injected into the firm, as its new investor is a far cry from the beige cardigan and baked beans image which BT carries. He is uber-rich French sophisticate Patrick Drahi.

Mr Drahi is famous in the United Kingdom already, largely for his ownership of the Sotheby’s auction house. He has bought a £2.2billion stake in BT, making him the telecoms giant’s biggest investor.

In keeping with his suave, sharp-dressed stature, Mr Drahi is well known for being a ruthless manager who cuts costs and streamlines companies that he invests in.

There are now concerns that Mr Drahi, who purchased his massive stake in BT via his company Altice, may chop senior executives in his efforts to increase the bottom line.

Investor confidence, however, is up. Shares in BT rocketed this morning partly because of Mr Drahi's huge investment in the company giving him the largest controlling stake, but also because he personally backed BT’s £15billion plan to roll out rapid fibre broadband in Britain, something the country desperately needs.

About 5 years ago, it was made public information that despite over 40 million people living outside Greater London, only 10% of all internet traffic goes north of the Greater London boundary. With BT owning the vast majority of infrastructure in the UK, and many competitors actually leasing lines from BT and then reselling them to consumers, this rollout should make a huge difference to the quality of the national network.

Mr Drahi, who holds French, Israeli and Portuguese citizenship, is well-known in the telecoms world. He is the bastion of hard-working immigrant determination, having come to France from Casablanca, Morocco aged 15 at a time during which many Sephardi Jews left Morocco for France, Canada or Israel.

Mr Drahi is a notorious philanthropist, having founded alongside his wife Lina, the Patrick and Lina Drahi Foundation (PLFA) to support innovative programs in the areas of science and education, entrepreneurship and innovation, the arts, and Israel and the Jewish people, through organizational grants. Incorporated in 2016 and headquartered in Zermatt, Switzerland, the foundation supports programs in Switzerland, France and Portugal.

He purchased a series of companies in Europe and the US since the early 2000s, when he founded Altice, a company that has angered the trade unions - the bain of French industry - who have been compiling a list of cost-cutting measures taken by Mr Drahi. Telecoms company SFR even got its unions to reveal that bathroom tissue was at a shortage in its offices last year!

An interesting item to use as a battle between Mr Drahi's staunch capitalism and French trade union socialism.

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