BT agrees deal to sell Italian business #ItalyFinance

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BT has agreed to sell BT Italia to local telecoms provider Retelit as chief executive Allison Kirkby refocuses the company on the UK.

BT’s Italian operations — which service about 350 corporate customers — generated revenues of about €160mn in 2024, the company said on Wednesday. Financial terms of the deal were not disclosed.

The decision to exit BT Italia forms part of Kirkby’s efforts to jettison the group’s international operations and refocus BT on its domestic telecoms and broadband business. In February, BT agreed to sell its Irish wholesale and enterprise division to Speed Fibre Group.

The withdrawal from Italy closes a difficult chapter for BT. The company has been pulling back from the country since taking a £530mn writedown relating to an accounting scandal at BT Italia in 2017.

An investigation found that profits had been overstated for several years. Last year, an Italian court convicted eight people for manipulating financial statements However, BT Italia was acquitted of any wrongdoing.

Karen Egan, head of telecoms at Enders Analysis, said the Italian business had been “quite a thorn in the side of BT over the years” and that Kirkby “will be very pleased to have done a deal to sell it”.

“The Italian accounting scandal was particularly bruising, denting confidence in the entire non-UK business,” she added.

Investors have supported Kirkby’s turnaround plans for the company, which include slashing costs by £3bn and increasing its dividend. Efforts to cut BT’s workforce from 130,000 people in 2023, to between 75,000 and 90,000 by 2030, are on track, according to people close to BT.

The FT previously reported that Sunil Mittal, the Indian billionaire who owns a 24.5 per cent stake in BT, was open to increasing his stake in a vote of confidence in the company. BT’s share price has risen about 50 per cent since Kirkby took over in February last year.

BT is being advised by bankers from Jefferies on the BT Italia sale, which is subject to approval by competition regulators.

Retelit is expanding its footprint under the ownership of Spanish infrastructure investor Asterion Industrial Partners. The company, which focuses on business to business telecoms services, this month partnered with the Italian government to acquire a majority stake in Sparkle, another Italian telecoms service provider, for €700mn.

Egan said Retelit would probably have been able to buy BT Italia for a negligible sum. About 370 of the division’s employees would move to Retelit as part of the transaction and there were no plans for redundancies, a BT spokesman said.