BT Exits Consumer Biz in Ireland

BT Group plc (NYSE: BT; London: BTA) is getting out of the consumer voice and broadband business in Ireland and will hand over its customers to Vodafone Group plc (NYSE: VOD) in an agreement announced today.

Over the next several months, Vodafone will gain 84,000 consumer and 3,000 small business customers from BT, making the mobile operator the No. 2 fixed-line broadband supplier in the country. Also part of the agreement is a seven-year contract for Vodafone to get wholesale broadband network services from BT.

A "small number" of BT employees will transfer to Vodafone, the release says.

Without its consumer business, BT will focus on delivering networked IT services to corporate customers and building up a wholesale broadband infrastructure business in the country through local loop unbundling (LLU). Vodafone will be BT's first wholesale broadband customer for those services.

The companies said the value of the assets involved in the transaction was €4.8 million (US$6.8 million).

BT Ireland's CEO Chris Clark tells Light Reading that its consumer business was less than 10 percent of the company's business and that the deal "makes sense" for the companies, customers, and for Ireland.

"Our core focus has been the corporate market," says Clark. "And infrastructure-based competition hasn't happened in Ireland."

BT plans to invest "multimillions" of euros over the next two years in unbundling 58 additional exchanges in the country, Clark says. The operator has unbundled 22 exchanges to date.

BT says the unbundling program will make it possible to deliver 24-Mbit/s broadband services on about two thirds of available broadband lines in the country.

For Vodafone, the transaction furthers its strategy to increase its fixed-line broadband business across all its European markets. (See Vodafone Adjusts to Hard Times .)

The deal is subject to approval by the Irish Competition Authority.

— Michelle Donegan, European Editor, Light Reading