UK telecoms giant BT Group has hired investment bankers at UBS to advise on a fresh effort to sell its Irish unit, more than four years after talks to dispose the business for about €300 million were abandoned, according to industry sources.
BT chief executive Allison Kirkby signalled in May that the group was “exploring options to optimise [its] global business” as it refocuses on its home market amid a multibillion-pound cost-cutting programme.
Sky News reported the previous month that BT was considering putting the Irish unit back on the market.
“BT continually reviews our operations to ensure they align with our global strategy. We have an excellent business in Ireland and no decisions have been taken,” said a spokeswoman for BT, who declined to comment on the sale plan. A spokesman for UBS also declined to comment.
BT Ireland, which is led by managing director Shay Walsh and has about 650 employees, is the second-largest fixed line wholesaler in the Republic with wholesale customers including Vodafone, Sky and Three and corporate customers including Bank of Ireland.
It has also operated the Republic’s 999 and 112 emergency call-answering service (Ecas) for the past 15 years.
The company has pulled out of the running in a Department of Communications tendering process relating to the next Ecas contract. BT Ireland’s agreement runs until November 2025, though there is a clause in the documents that allows the Government to extend the term for a further two years.
Industry sources said the decision to back out of the procurement process for the next emergency calls service contract, a low-profit line of business, may boost the appeal of BT Ireland to potential buyers.
“We continually review our operations to ensure they align with BT’s global strategy, and we have made the decision to not proceed in the procurement process for a new contract to operate the Ecas in Ireland,” the BT spokeswoman said.
“We are fully focused on maintaining the highest standards in the delivery of our current contract, which extends until 2027. We will work hand in hand with [the department] to provide a seamless transition to a new operator, once appointed.”
A spokeswoman for the department declined to comment on whether there were any other parties bidding for the new Ecas contract.
BT made an initial foray into the Republic in 1998 when it set up Ocean, a fixed-wire joint venture with ESB. The London-based group acquired Denis O’Brien-founded Esat Telecom two years later. It subsequently bought ESB out of Ocean to settle a dispute with the State-owned electricity group over the Esat deal.
BT rolled Esat’s mobile business, Esat Digifone, into its wireless division, which would be spun out in 2011 as a separate company initially called mmO2, but later rebranded O2. Spain’s Telefonica bought O2 in 2005, before selling the Irish mobile business to Three Ireland in 2014.
BT Group entered exclusive talks in 2019 to sell BT Ireland to UK investment firm Mayfair Equity Partners. However, the talks broke down early the following year, with the decision reportedly down to a change of heart on the part of BT at the time.
BT Communications Ireland Ltd, the company behind BT Ireland, saw its revenues increase 3 per cent to €343 million in the year to March 2023, according to its most recent annual financial statement. This was driven by increased services to data centre services, broadband and sales of equipment for resale to big multinational customers.
Operating profit decreased by 6 per cent to €44.6 million, amid rising staff costs and depreciation charges. The operating profit figure was broadly in line with the out-turn for 2019, when Mayfair was in talks to buy the business. However, revenues were running at a higher level at the time of those discussions, at almost €420 million.
- Sign up for the Business Today newsletter and get the latest business news and commentary in your inbox every weekday morning
- Opt in to Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
