News
Fastweb, Vodafone reportedly mulling a potential move as Global Services considers a new approach to serving overseas customers.
BT plans to sell its troubled Italian business and local rivals are preparing to make offers, it emerged over the weekend.
Sources cited by the Telegraph on Saturday claimed that a board delegation recently visited BT Italy’s new management with a view to "making sure BT Italia is packaged up as something that can be sold."
Fastweb and Vodafone are said to be interested in acquiring the assets.
According to the report, BT does not expect to make much money from the sale, but it would prefer to cut its losses and change the way its Global Services unit serves overseas enterprises.
BT’s shares saw their biggest ever one-day fall in January after it emerged that the accounting scandal at its Italian arm was more serious than first thought.
Investigations carried out internally and by KPMG found evidence of improper accounting practices, and improper sales, purchase, factoring and leasing transactions. The malpractice led to the overstatement of BT Italy’s earnings over the course of several years.
The U.K. incumbent recorded a £530 million (€613.8 million) writedown on the value of BT Italy. Furthermore, a slowdown in corporate IT and public sector spending also took its toll on Global Services, prompting BT to lower its revenue, EBITDA, and free cash flow guidance for fiscal 2016/17.
According to the Telegraph, BT aims to improve Global Services’ performance by adopting a cloud-based approach to serving overseas customers, rather than own and operate its own infrastructure in each market.
