Wednesday, 08 April 2020

BT offloads LatAm operations to CIH Technology

by Harry Baldock, Total Telecom
Friday 20 March 20

Domestic operations and infrastructure in 16 LatAm countries are being sold for an undisclosed financial sum

For some time now, BT has been working towards stripping back its international business portfolio to focus more directly on its home markets. The strategy change came partly as an attempt to rally falling share prices, but also as a reaction to oversees controversies, such as the fraud case in which BT Italy was embroiled last year…

For some time now, BT has been working towards stripping back its international business portfolio to focus more directly on its home markets. The strategy change came partly as an attempt to rally falling share prices, but also as a reaction to oversees controversies, such as the fraud case in which BT Italy was embroiled last year.
 
Today, BT has announced it is selling a large chunk of its Latin American operations to CIH Technology for an undisclosed sum. This sale sees BT’s exit from 16 of the 28 LatAm countries it currently does business in, which represents about a quarter of the 60 countries in which BT operates globally.
 
The UK’s largest operator will still retain a presence in the region, however, with CIH agreeing to serve as a channel for BT’s products and services. 
 
"Today's announcement is a key milestone in the execution of our strategy to become a more agile and focused business,” said Bas Burger, chief executive of Global at BT. “It comes at a particularly challenging time for the global economy. As such, it is a sign of our determination to keep the business moving forward and continue connecting communities, businesses, and governments. I am pleased to begin a new chapter in the region with CIH, providing continuity for our people and our customers."
 
The divestment includes the sale of two fibre networks, 2,000km of leased fibre lines, and four data centres. It is, of course, subject to regulatory approval and is expected to close later this year.
 
BT is not alone in pulling back from its Latin American expansions to double down on its domestic market. Indeed, Deutsche Telekom and notably Telefonica have been doing likewise recently, as the large operators struggle to compete in these challenging markets. There was even rumours back in January that a group of regional billionaires were lining up to make a bid for Telefonica's holdings in the region, though this has since been debunked.
 
Back in the UK, BT’s domestic network appears to be coping well with the strains of millions of people working from home due to the coronavirus pandemic. In a statement released today the company said that the usage level was still “well within manageable limits” and insisted that they had “plenty of headroom for it to grow still further”.
 
 
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