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BT is set to carve out its international business into a new standalone unit, as chief executive Allison Kirkby continues to consider a potential sale of the telecoms group’s non-UK operations.
The new division — which will comprise more than 8,000 staff — will report separately from the company’s UK business, according to a person familiar with the matter.
The FTSE 100 group is open to a sale of the carved-out unit, or it could seek to merge it with another operator, the person added.
The move comes as Kirkby continues her efforts to refocus BT on its domestic telecoms and broadband markets. The carve-out plans follow an agreement to sell the company’s Italian business to local telecoms provider Retelit last month.
In an internal memo sent to staff on Thursday, BT said the decision came as their competitors “gained strength”, with the separation giving the company “the best chance of success” in both domestic and international markets.
The company said in the memo that the international unit would be “industry leading” and confirmed to the FT that it would be headed by former BT Business chief Bas Burger.
Kirkby, who took over as CEO in February 2024, has set about streamlining BT through a series of cost-cutting measures to battle rivals including the soon-to-be-merged Vodafone and Three.
She announced a year ago that the group would be slashing costs by £3bn and increasing its dividend, while doubling down on plans to cut the workforce from 130,000 people in 2023 to as few as 75,000 by 2030.
There is a possibility that the carve-out could lead to further redundancies, according to a person familiar with the matter, but BT confirmed that all announced cost-cutting plans were on track.
Matthew Howett, founder of Assembly Research, welcomed the move, saying that “for too long” BT had “kicked the problem of global into the long grass”.
“While there is likely to be some short-term pain, the longer-term certainty around [the unit’s] future can only be a good thing for [the] group,” he added.
James Ratzer, analyst at New Street Research, said quantifying the value of the new unit would be extremely difficult due to BT’s historical decision not to separate financial disclosures between units.
“If though this [BT] can unlock hidden value and refocus attention on the more profitable UK assets, it could be a positive catalyst,” he added.
Kirkby’s turnaround plans have been welcomed by investors, with BT’s share price having risen about 50 per cent since she took the helm last year.
Sunil Bharti Mittal, the Indian billionaire who has a 24.5 per cent stake in BT, is open to increasing his holding in a vote of confidence in the company, the Financial Times has previously reported.
BT is set to announce its full-year results next week, in what will be a key marker for investors on Kirkby’s progress.
