LONDON BT Chief Executive Ian Livingston said on Wednesday he was stepping down to take up a government job promoting British business, knocking shares in a telecom company he has helped reposition on the path to growth.
Livingston, in charge since 2008, has taken BT to the verge of a return to overall revenue growth after the former state monopoly was brought low by a series of profit warnings five years ago.
Investors wiped more than half a billion pounds from the market value of BT in response to the announcement, worried that its recovery might lose momentum under successor Gavin Patterson, its head of retail.
"The question mark that everyone's going to have is, has he got that widespread set of skills that Ian had around finance, around dealing with the regulators, and that I think is going to be something that the market will worry about," said Liberum analyst Lawrence Sugarman.
Under Livingston BT has placed a big bet on superfast broadband, investing more than 2.5 billion pounds to roll out coverage to more than two-thirds of the UK population by the end of spring next year.
The company has also now launched the next phase of its ambitious strategy by splashing out on costly sports rights in a bigger push into television.
Strong results and the new strategy had helped BT's shares reach their highest levels since 2007.
But the stock fell as much as 3.9 percent immediately after the announcement that Livingston would in December replace former HSBC chairman Stephen Green as Minister for Trade and Investment.
Shares in the company pared earlier losses to trade down 1.7 percent at 1531.
Andrew Millington, Investment Director of UK large companies at Standard Life Investments, the number six shareholder with a 1.84 percent stake in the company according to Reuters data, said that he welcomed Patterson's appointment as a safe pair of hands.
"That message of no strategic change, given the success of the last five years, that's what shareholders are going to be looking for," he told Reuters.
Paterson, aged 45, has been at BT since 2004, primarily working in its retail division. He previously worked for cable company Telewest.
Livingston will be tasked with driving investment in Britain and promoting exports, part of the government's attempts to restore the British economy to health.
(Reporting by Sarah Young, additional reporting by Rhys Jones, editing by Paul Sandle and Patrick Graham)
Our top photos from the last 24 hours.