BT’s global division up for sale

BT has quietly hoisted a for sale sign over its international arm as plans to transform the group’s fortunes under chief executive Allison Kirkby gather pace.

The Global division sits within the BT business unit and is headed by Bas Burger, who was appointed in April last year.

Global services include the sale of telephone and Internet connectivity to more than 1,000 multinational corporate clients worldwide.

But the division’s profitability has declined in recent years and earlier this year BT said it was looking at all options for the division.

A source close to the company told The Mail on Sunday that Kirkby was determined to sell the business and would be willing to listen to offers.

The company is difficult to value: it generated £2.4bn in revenue last year and £500m in profits, but had no cash flow.

The source said Kirkby had made it clear privately that selling assets outside the UK was a priority. “Allison has a history of making bold decisions and getting things done,” the source added.

Potential buyers include private equity houses. Some have expressed interest in the belief that the business could turn around within five years. According to analysts, US rival Verizon has been mooted as a possible buyer, while tech giants such as Amazon and Microsoft could also be interested.

Selling the division piece by piece is also an option. Two weeks ago it was reported that Macquarie-backed Viatel Technology was considering a move at BT Ireland. In September, Telecom Italia expressed interest in acquiring the remains of BT’s Italian business.

BT said: “It could be a transaction, whichever option maximizes value.” BT’s Business division, which includes the Global unit, accounts for 40 per cent of the group’s turnover. Its revenue fell 2 per cent to £8.1bn in the year to the end of March.

Its operating profit fell to £646m, from £898m in 2023. Global is understood to be lagging within the Business division, frustrating Kirkby. Karen Egan of Enders Analysis said: “The problem is that Global sells a lot of legacy services that simply aren’t as profitable.”

The move comes as BT prepares to reveal its half-year results this week. Under the Kirkby government, which took power in February, BT’s share price has risen 32 per cent. Analysts are awaiting updates on the performance of Openreach, which manages the UK’s broadband network.

They will also want to know what role artificial intelligence will play in the group’s future.

Kirkby is under pressure from three billionaire investors over BT’s share registration. In August it was revealed that Indian telecoms tycoon Sunil Bharti Mittal would take over a 25 per cent stake in billionaire Patrick Drahi’s troubled Altice. The move came just a month after one of the world’s richest men, Mexican Carlos Slim, acquired a 3 percent stake in BT.

Neither Mittal nor Slim have made public their intentions with BT.