BT Group, Verizon to form enterprise comms joint venture

With a stated and clear focus on growing fibre and 5G, the Business division of BT Group has been on something of a back burner for some time now, but in what the UK’s leading network provider and global communications giant say could no less than “transform international connectivity”, BT and Verizon Communications are to combine their international enterprise operations into a 50:50 joint venture.

The partnership is expected to serve more than 3,000 customers across over 180 countries, representing approximately $4bn in combined annual revenue.

Moreover, BT and Verizon are confident their mutual breadth of operations will unlock significant scale efficiencies across the combined global network and service operations following completion.

Designed specifically for a cloud-first world in the age of artificial intelligence (AI), the joint venture brings together BT International, which serves multinational customers with communication and network services around the world, with Verizon’s international enterprise wireline arm, which provides connectivity to enterprises worldwide. Both BT and Verizon will hold equal voting rights, and Verizon has agreed to pay BT an equalisation payment of $625m.

By combining global scale with infrastructure designed and built to support local compliance and sovereignty needs, the firms assured that the partnership will create a stronger platform for growth and accelerate the roll-out of next-generation connectivity platforms.

On completion of the transaction, the venture will look to establish commercial relationships with both BT and Verizon – providing what the firms say will be a “seamless”, end-to-end service across borders for customers in the UK (BT) and the US (Verizon).

As regards the benefits to be gained, BT noted that customers will be able to access secure and resilient connectivity designed to meet data, operational and regulatory requirements. While at the same time, it says itself and Verizon will be better able to focus on respective domestic markets, while providing support to the project as equal shareholders.

Martijn Blanken has been confirmed as CEO-designate of the joint venture, conditional on the completion of the transaction. He boasts almost three decades in senior leadership positions across telecommunications, technology and digital infrastructure at Telstra, Openwave Systems, EXA Infrastructure and KPN, and a career spanning four continents.

Blanken will join BT from 1 September, and work with both parent companies while observing relevant regulatory requirements as they prepare for the launch of the proposed joint venture.

The transaction is subject to regulatory clearances and consultation with employee representations in countries where required. BT and Verizon’s international businesses will continue to operate independently until the transaction officially closes, with a full commitment to their respective customers.

Clive Selley will continue to lead BT International as CEO, ensuring said BT continuity of its International division’s ongoing transformation in readiness for the creation of the joint venture. Verizon’s leadership will remain unchanged.

BT Group chief executive Allison Kirkby said: “The world’s leading brands and international organisations trust BT International to connect them across the world. Bringing together this expertise and heritage with Verizon’s deep relationships with multinationals will create a stronger, scaled connectivity partner – one that has the reach, innovation and investment to succeed.

“Customers will benefit from new, secure and resilient connectivity platforms, which are designed for the age of AI and sovereign where it matters,” she added. “It will create new opportunities for our people and long-term value for our owners. Today’s announcement marks a major milestone for BT International, and an important step forward for BT as a whole, as we deliver on our UK-focused strategy.”

Verizon CEO Dan Schulman said: “Our international customers require secure, flexible connectivity that works seamlessly across borders and cloud environments. When we thought about how to best support them, this joint venture was the clear answer: a cutting-edge, AI-ready and secure platform run by a single global organisation dedicated to their needs. At the same time, our relationship with those customers will stay equally strong as we continue to directly provide them with the connectivity they need in the US.”