Five Big Questions for BT’s New Head of Consumer

Next month marks the start of a new era at BT as Claire Gillies officially takes over from Marc Allera as CEO of its Consumer division. The Canadian, who has been CEO-designate since December 2024, joins from Bell, where she held many senior roles over more than two decades, most recently as president of its wireless division. Here, I highlight five burning questions for the new boss.

What’s the Branding Strategy?

Recent press reports suggest that Mr Allera’s decision to largely focus BT’s consumer offers on the EE brand is under review. My sense is that Ms Gillies will slow this transition but won’t reverse it.

EE has always positioned itself on quality of service and Mr Allera used to regularly declare that his customers “could buy cheaper, but never better”. However, against a tough economic backdrop, this message became harder to land as mobile virtual network operators (MVNOs) and sub-brands gained share.

For this reason, the recent move to discontinue the Plusnet mobile offer, targeted at the competitive entry segment of the market, came as a surprise. I wonder if Ms Gillies will reconsider that decision or even launch a new discount offer. With Vodafone’s Voxi, Three’s Smarty and O2’s giffgaff all performing well, BT stands out as the only network without a sub-brand.

The BT brand may also stick around in the consumer market for longer than expected. According to the media, the company is concerned that further scaling back BT may alienate older customers, who have a greater attachment to the brand. The company never said it was axing BT from the consumer market, but it will be interesting to see whether it now gives it greater prominence.

What’s the Future of New EE?

New EE was one of Mr Allera’s biggest legacies. Unveiled in 2023, it sought to make the EE brand more relevant among UK consumers, paving the way for a push into new areas beyond connectivity. However, I’m hearing that some parts of the strategy will be pared back.

I’d imagine the focus on gaming will remain. Mr Allera identified this as a leading growth opportunity as he struck partnerships with major brands to launch new bundles as part of a drive to make EE the “number-one destination for gamers in the UK”. As operators seek new opportunities beyond connectivity, this seems like a logical extension of their core offering.

However, the approach to sell a range of consumer products through the EE app always felt more ambitious given the dominance of players like Amazon and Currys. Furthermore, proposed forays into travel and home insurance never got off the ground. I expect both to be re-evaluated.

With experience in consumer electronics retailing, I’d expect Ms Gillies to continue EE’s strong recent focus on stores — it’s opened more than 30 experience outlets since the launch of the flagship EE Studio in London nearly two years ago. Although shops are an expensive investment at a time when people’s lives are increasingly moving online, our consumer research indicates that many people still cherish face-to-face interactions.

What Will Be the Impact of the Vodafone–Three Merger?

Ms Gillies joins at a pivotal moment, following recent regulatory clearance for the joint venture between Vodafone and Three. Once the deal is approved, expected in the next couple of months, there’ll be a new market leader in mobile services, with a combined 29 million retail customers. EE will be relegated to the third spot, behind O2.

At some point, Vodafone–Three will pose a major threat to EE’s long-running claim to offer the UK’s “best and most reliable mobile network”; testing company RootMetrics has awarded it this accolade 11 years in a row. But the joint venture has the scale and assets to challenge its position, and Ms Gillies will need to think carefully about how to evolve the narrative about its network.

In the nearer term, the new boss needs to be ready to respond if the joint venture makes any disruptive or unexpected moves. In particular, she should observe its strategy in fixed wireless access. It has bold ambitions for the technology that could affect the home broadband and converged service markets.

But she shouldn’t go fully on the defensive. Companies that merge can easily become distracted by internal integration. If the joint venture takes its eye off the market, rivals like EE should be ready to pounce on any disillusioned customers.

BT may also look to more assertively target MVNOs in a bid to better profit from its network investment. O2 already dominates this market, but the combined Vodafone and Three has spoken bullishly about how it will create a more attractive alternative for virtual providers. BT may want to move quickly before the joint venture fully gets up to speed.

What Can Reignite the Market for Convergence?

The industry continues to talk up the importance of converged services, but progress has been slow. At BT, less than a quarter of households taking at least one BT service actually take two or more.

Ms Gillies needs to work out how to kick-start this opportunity, and I’ll be watching to see if she looks to evolve the concept beyond just discounting. The launch of EE One in 2024 seems to be driving some momentum, but it’s essentially just a cross-selling strategy to offer more attractive prices to people taking both broadband and mobile services.

There could be new competition in this market too, not just from the combined Vodafone and Three, but also from new competitors like fibre “altnets” and MVNOs.

What Lessons Can Be Applied from North America?

I’ll be interested to see the extent to which Ms Gillies draws on her long tenure at Bell and whether there are any success stories she can replicate in the UK. But she needs to be wary of the differences between the two markets. For example, customer spending in Canada is far higher than in the UK and it doesn’t have such a vibrant MVNO sector.