BT, Verizon Team Up For International Enterprise

This week we have some high profile consolidation in the networking business, specifically in the international enterprise arena. BT Group and Verizon have decided to create a 50/50 joint venture, combining BT International and Verizon’s international enterprise wireline going forward.

The new JV will have some $4B in annual revenue and serve some 3,000 customers in 180 countries worldwide. Martijn Blanken will be CEO when the transaction completes sometime next year — of course there are just a few regulatory clearences to get first.  And somewhere along the way they will have to give it a name, which I’m sure will be the focus of many, umm, focus groups over the next couple quarters.

Once the combination happens, BT and Verizon envision an AI-enabled business that serves multinational customers worldwide. Exactly what AI-enabled will mean in this sector by next year’s time is anybody’s guess given how fast that world is evolving.  Each company will hold equal voting rights, but Verizon will be paying an ‘equalisation payment’ of $625M to even things out. The new JV will obviously have a substantial commercial relationship with each of its parents when operating in the US and the UK.

Meanwhile, BT and Verizon will both be able to do what companies with incumbent roots always want to do themselves, which is focus on their domestic markets. The international enterprise business is a very different world requiring a different coporate culture and a different set of border-crossing skills.  This transaction will enable both companies to add some separation between their national infrastructure efforts and that global business community.

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