BT efforts to reduce low-margin revenue at its troublesome Global business unit have taken another turn.
Following on the heels of impending exits from Spain and Latin America, the UK incumbent announced it was in "exclusive negotiations" with IT services group Computacenter with a view to selling its domestic operations in France.
Assuming a sale is agreed and waved through by relevant authorities, there won't be much of an impact on the Global unit's top line (although BT presumably thinks it will have some sort of uplift on profit margins).
BT's domestic operations in France, which involves management and maintenance of IT and network infrastructure – as well as networking and related professional services – drummed up relatively modest revenue of £104 million (US$122 million) in the fiscal year ended March 2019. Turnover at Global, for the nine months to December 31, 2019, was nearly £3.3 billion ($3.9 billion).
BT said it would still retain a "strong presence" in France, even if it did manage to offload domestic operations. The UK incumbent pointed out it will continue serving multinational businesses and other organizations, as well as providing access points to its global network. BT's recently opened Cyber Security Operations Center, based in Paris, similarly continues as usual.
BT and Computacenter said they intended to enter a partnership agreement in France. This, they claimed, will ensure continuity for existing customers. More vaguely they spoke about exploring "future growth opportunities."
Any agreed sale will be subject to consultation with works councils over a minimum period of two months, although BT implied this process might be disrupted in the event of any additional French government guidance in relation to COVID-19. Once that stage is complete, regulators then get to decide on approval.
If all goes smoothly, said BT, the transaction should be wrapped up by the end of the year.
— Ken Wieland, contributing editor, special to Light Reading