BT, Reuters in $3B Pact
The U.K. operator is to provide the media company with global telecom services for eight years, and, to help it do that, the operator has bought Reuters' international data network, Radianz, for $175 million (see BT to Extend M&A Spree).
That acquisition, due to close some time in the next three months, concludes a spurt of acquisitions that has seen BT quickly grow from a U.K.-focused operator into a global service provider, with greater network depth in continental Europe, in just six months (see BT Goes Global – Again! and BT Takes Control of Albacom).
The managed services deal is the latest in a string of lucrative ICT (information and communications technology) outsourcing deals won by the British carrier. (See BT Lands £500M Barclays Deal, BT Lands Volvo Deal, BT Launches Global Campaign, BT Wins Major Airports Deal, BT Inks ICT Deal With HP, BT Cops €31M Dutch Deal, and BT Wins $73M ICT Deal .)
BT will operate and manage secure data networks that will deliver Reuters' information services to its customers all over the world. The carrier believes it to be the biggest services deal of its kind, worth potentially more than $3 billion over its eight-year lifetime.
The deal gives the British carrier a sizeable foot in the door of the world's financial institutions, Reuters' main customers. "The acquisition of Radianz is of strategic importance as the global financial services market offers a huge opportunity to BT, and this will form the cornerstone of our approach to this sector,” said BT's CEO Ben Verwaayen in a prepared statement.
But financial analysts are uncertain about the potential profitability and margin stability of these wide-ranging services deals, and BT's share price dipped slightly, down 1.5 pence to £2.025 (US$3.90) this morning on the London Stock Exchange.
— Ray Le Maistre, International News Editor, Light Reading