BT boosts global profile with Infonet acquisition

BT, the UK telecoms company, is to buy the US-based voice and data network provider Infonet Services Corp for £520 million.


The loss-making company, with sales of $620 million (£330m) in its last financial year to March 04, specialises in managed data network and IP services. In the same financial year, BT had sales of $24 billion (£13bn).

Infonet also boasts an impressive array of multinational customers, including Nestlé, Nokia, DHL and the US government.

The deal marks a return to the international arena for BT, which had more recently focused on its core UK business, having sold off its international units.

“We’re pleased to see that BT is boosting an area of its core networking competence, rather than taking a more risky step in, say, the international IT services market,” said Julian Hewett, chief analyst at research company Ovum. “This will certainly improve BT’s position in the Americas and Asia Pacific,” he added.

The deal represents something of a bargain for BT. Back in 2001, Infonet was valued at £30 billion. The company has a net cash balance of £210 million meaning the aggregate worth of the deal is £310 million – less than one year’s annual revenue.

BT aims to generate cost savings through increased efficiency in administrative and back-office operations and is likely to consolidate the BT and Infonet national networks.

The transaction is subject to regulatory approval, which could take several months.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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