BT and Verizon have announced a 50/50 joint venture combining their international operations, ending the British telecom group's more than 18-month search for a buyer. The deal is expected to create a company with over 3,000 customers across roughly 180 countries and $4bn in combined annual revenue.
Verizon will pay BT a $625m (£473m) equalisation fee to guarantee equal voting rights in the new venture. The announcement marks a strategic shift for BT as its chief executive, Allison Kirkby, refocuses the company on the UK market.
BT's Strategic Shift and Cost-Cutting
Kirkby, who became CEO in February 2024 after serving on BT's board, described the deal as an important step for BT's UK-focused strategy. She has overseen a multibillion-pound cost-cutting programme, recently raising BT's savings target from £3bn by 2029 to £3.7bn by 2030. BT's headcount is expected to fall to between 75,000 and 80,000 by the end of the decade, at the lower end of the 75,000–90,000 range set in 2023.
Kirkby's pay and bonus package more than doubled last year to £5.6m, the largest award to a BT boss in over a decade. BT shares have risen more than 70% since she took the role.
Verizon's Parallel Cost-Cutting
Verizon has also been reducing costs, announcing in November that it would cut about 13,000 jobs. CEO Dan Schulman said the company needed to simplify operations to address complexity and friction that slow down and frustrate customers. He stated that the joint venture with BT would provide a cutting-edge, AI-ready, and secure platform run by a single global organisation dedicated to customer needs.
Leadership and Structure
The new business will be led by Martijn Blanken, a former Telstra executive. It will be incorporated in Jersey and headquartered and tax resident in the UK. The deal is subject to regulatory clearances and consultation with employee representatives in some countries. The international businesses will operate independently until the transaction is complete.
BT's Global Services History
BT's global services division was once a major growth driver and its largest revenue source, but profits remained low. Last year, BT carved out the international business into a standalone unit employing over 8,000 staff. The company has been divesting parts of its international operations for a decade following an accounting scandal at its Italian operation, which wiped more than £8bn off BT's market value in a single day and cost former CEO Gavin Patterson his job.
BT sold part of BT Italia to Telecom Italia in 2020 and the remainder to Retelit last year. In September, it completed the sale of its wholesale and enterprise business in Ireland to Speed Fibre Group. In January, it sold BT Federal, its US government contracting subsidiary, to 22nd Century Networks.
