Ben Verwaayen is stepping down as CEO of BT Group from 1 June to be replaced by Ian Livingston, current CEO of BT Retail, signaling expansion of the global services operation.

Livingston, who will be one of the youngest chief executives of a Footsie 100 company, joined BT as group finance director in 2002. He took over as chief executive of BT Retail in 2005 and under his leadership BT Retail has returned to growth and sharply increased profitability.

Livingston signalled there would be no major changes when he took over, although there would be an expansion of the global services business. "We've got exactly the right strategy. We are a world leader and it's something we should be proud of in the UK,” he said. "We are already the best for service in our industry, but we need to be seen as the best for service among all service companies, whether for multinational or a customer that just has a land line."

After six years in charge, Verwaayen said: "I've been very clear from day one that effective management has a limited shelf time." Verwaayen joined BT in January 2002 from Lucent Technologies, where he was Vice-Chairman of the management board. He led BT through a series of transformations, including its push into broadband, the launch of the 21CN initiative, the expansion of BT Global Services, and the creation of Openreach, which gives all communication providers in the UK equal network access.

BT Chairman Sir Mike Rake paid tribute to the departing CEO. "Ben has been an exceptional CEO whose courage and leadership has transformed BT from being a deeply troubled organisation into a thriving business with global capability and a clear strategy for the future,” he said.

Analysts said Verwaayen left the company in a good state. “His legacy is a company that is in good financial health, well managed, and one that embraces change,” said Mike Cansfield of research house Ovum, citing achievements including: “sorting out the mess he inherited when he joined BT in 2002; personally initiating a constructive dialogue and rapprochement between BT and Ofcom; and championing the climate change agenda across UK industry, to name but three.”

Cansfield said Livingston had long been the obvious internal candidate to replace Verwaayen. “Along with Ben and ex-Chairman Sir Christopher Bland, as Group CFO, he was part of the trio that led BT back from the abyss,” he said. “For the past three years he has headed up BT Retail (which covers UK consumers and businesses - excluding corporates) and managed a return to revenue growth and profitability for this division. In our view, the future of BT is inextricably linked with expanding on the successes to date of BT Retail. To do this necessitates an understanding of how to compete successfully in this congested market, and hence requires strong marketing skills. Ian brings this from his past at DSG, so is well placed to succeed in his new role. Interestingly Gavin Patterson in BT Retail has an fmcg background, so BT now has a significant marketing presence at Board level.

“We have said in the past that BT is a well managed company. Clearly this succession has been carefully planned. Last year Sir Christopher was succeeded as Chairman by Sir Mike Rake. This year Ben is to be seamlessly succeeded by Ian as Group CEO, and Ian by Gavin in BT Retail. Cast your mind back six years ago when Chairman Sir Iain Vallance, CEO Sir Peter Bonfield, and CFO Phillip Hampton all left within a short time of each other. As evidence of good management BT has clearly mastered succession planning.”