BT hires Ofwat chief before watchdog battle

BT has hired the chief executive of Britain’s water industry watchdog to lead it into battle with Ofcom, following a series of heavy blows from the regulator. Cathryn Ross, who has run Ofwat for three years, will join the telecoms company to head its regulatory affairs operation.

Christopher Williams

Jillian Ambrose

BT HAS hired the chief executive of Britain’s water industry watchdog to lead it into battle with Ofcom, following a series of heavy blows from the regulator.

Cathryn Ross, who has run Ofwat for three years, will join BT to head its regulatory affairs operation, The Daily Telegraph has learnt. She will arrive at a crucial time for the telecoms giant as it tries to recover from a torrid year.

BT is in the process of legally separating its network arm, Openreach, as an independent subsidiary that will be closely monitored by Ofcom. Ms Ross is also likely to play a major role in a rearguard action over the regulator’s plans for new price controls on superfast broadband next year.

She will take on regulatory responsibilities previously held by Sean Williams, BT’S chief strategy officer, who is leaving the company.

Ms Ross’s appointment is part of a broader shake-up of BT, which underestimated the determination of regulators and politicians to impose change on Openreach.

Consultants from Mckinsey are advising senior management on plans to merge lines of business. Meanwhile, corporate, regulatory and communications functions are already being overhauled with further appointments, including Baroness Bertin, David Cameron’s former press spokesman.

The changes are being made by Gavin Patterson, the chief executive, before Jan du Plessis becomes chairman in December. He is already on the BT board, however.

Ms Ross is widely credited for driving a step-change in the regulated industry during her tenure by squeezing better value for customers from their water suppliers.

Ofwat has demanded water companies cut bills by 5pc, while increasing their investment in pipes and sewers to a total of £44bn. At the same time Ms Ross loosened the shackles of the sector’s regional monopoly structure by opening the business retail market to competition in England and Wales for the first time.

Jonson Cox, the Ofwat chairman, said she had been “a transformational leader” for both the regulator and the wider sector.

“As chief executive she has created a dynamic and leading-edge regulator, effective in driving change across the water sector and putting customers first. We wish her every success in her new role,” he said.

Ms Ross said she would finalise the methodology for the next regulatory period, which begins in 2020, before she leaves. It is widely expected to be even tougher than the current requirements.

“I will be leaving Ofwat in good shape. Our regulatory approach is now well established and we have a strong team in place. We are ready for a demanding price review, which will deliver more of what matters for customers,” she said.

Ofwat said it had begun the process of recruiting a successor. BT declined to comment.