The move is no surprise – Group CEO Allison Kirkby’s focus is on the UK market and it positions the international business for sale, in whole or part, or a merger
BT Group is to turn its international business (formerly BT Global) into a discrete unit which, for the first time, will report international B2B earnings separately.
The new unit will have more than 8,000 staff, according to unnamed sources cited in the Financial Times [subscription needed].
It will be easier to sell an semi-detached B2B international unit, in whole or part, or maybe merge with another operator group, than as an integral part of BT Group. All these are options Kirkby has mooted previously and maybe now there is a buyer or partner waiting in the wings. Interestingly, BT told the FT that Bas Burger (pictured), formerly CEO of BT Business (see below) will lead the new international division.
In January Burger stepped down from his role as CEO of BT Business to devote “all of his time to the optimisation of BT’s international operations and explore options for the unit,” according to a statement from BT.
There is no doubt that in addition to allowing the former state-owned incumbent to focus on its home market, BT Group is hoping to release value from the situation. However, having always refused to break out the its individual units’ earnings, it will be interesting to see what value is put on it.
In, out, shake it all about?
For years prior to Kirkby taking the helm, BT hasn’t seemed to know what to do with its international B2B division. Things came to a head when it brought the entire group into disrepute following a fraud scandal in its Italian unit to the tune of about £0.5 billion, which came to light in 2016.
The scandal, not the first in the international division’s history, also did immense damage to BT’s share price, knocking about 20% or £6 billion off its value in the immediate aftermath. Subsequently, BT pared back its international business and has sold off many assets, most recently to Retelit in Italy last month.
Then at the end of 2022, when Philip Jansen was Group CEO, what had been BT Global (and before the Italian scandal BT Global Services) was put under the umbrella of BT Business, with BT’s long struggling UK Enterprise division.
Kirkby’s focus on the domestic market, cost-cutting and improving the dividend has resulted in BT’s share price climbing by about 50% during her tenure which began in February 2024.
BT Global, as was, is widely recognised in the its trailblazing Global Fabric infrastructure which has striven to redefine resilience to suit today’s complex and shifting geopolitics: there is increasing demand for data to be stored, processed and routed within far stricter boundaries than previously.
