BT and Verizon to create joint global business in $625m deal

BT and the US mobile company Verizon are to combine their international businesses, ending the British telecom group’s more than 18-month search for a buyer.

Verizon will pay a $625m (£473m) “equalisation” fee to BT to guarantee equal voting rights in the new 50/50 joint venture, the companies announced on Monday. The deal is expected to create a company with more than 3,000 customers across about 180 countries and $4bn in combined annual revenue.

It marks the end of BT’s long search for a buyer of its international business, as its chief executive, Allison Kirkby, works to refocus the company on the UK market.

She said the deal marked an “important step forward for BT as a whole, as we deliver on our UK-focused strategy”.

Kirkby, who had been a BT board member and took the helm in February 2024, has overseen a multibillion-pound cost-cutting programme across the business. Last month she said BT would raise its savings target from £3bn by 2029 to £3.7bn by 2030.

BT’s headcount is expected to end the decade at between 75,000 and 80,000, towards the lower end of an estimated range of 75,000 to 90,000 set out in 2023.

Kirkby’s pay and bonus package more than doubled last year to £5.6m, which represented the biggest pay award to a boss of the telecoms company in more than a decade. Shares in BT have risen by more than 70% since she started in her role.

Verizon has also been cost cutting, announcing in November that it would scrap about 13,000 jobs across the organisation. Its chief executive, David Schulman, told employees at the time that the company needed to “simplify our operations to address the complexity and friction that slow us down and frustrate our customers”.

He said in a statement on Monday 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”.

The new business will be led by Martijn Blanken, a former executive at the Australian telecoms company Telstra. It will be incorporated in Jersey and headquartered and tax resident in the UK, the companies said.

The deal is still subject to regulatory clearances and consultation with employee representatives in some countries. The international businesses will “operate independently” until the transaction is officially complete, the companies said.

BT’s global services division was once a major growth driver, its largest by revenues, but profits have never been high.

Last year, BT carved out the international business into a standalone unit, which employs more than 8,000 staff.

The company has been in the process of divesting parts of its international operations for the last decade, following an accounting scandal at its Italian operation.

The scandal at BT Italia wiped more than £8bn off BT’s market value in a single day, and ultimately cost the former chief executive Gavin Patterson his job.

The company sold part of BT Italia to Telecom Italia in 2020, and offloaded the remainder to local telecoms provider Retelit last year.

In September, BT completed the sale of its wholesale and enterprise business in Ireland to Speed Fibre Group. In January, the company completed the sale of BT Federal, its US government contracting subsidiary, to 22nd Century Networks.