BT announced today that it will become Fiat's supplier of global telecommunications services through a contract worth €450 million over five years. BT will also acquire Atlanet, a Fiat subsidiary providing domestic telecommunications services to Fiat and other non-Fiat business customers across Italy.
Under the services agreement, BT will manage Fiat Group's global telecommunications requirements across 40 countries. This contract will enable Fiat to focus further on its core activities, while benefiting from BT's expertise in networked IT services.
The acquisition of Atlanet from Fiat further reinforces BT's position in the Italian market by contributing new customers and revenues and a strong existing relationship with Fiat. Atlanet also provides additional strength in IP services and incremental network coverage that will further support BT Albacom's strong growth momentum.
Atlanet achieved revenues of €155 million during the year to 31 December 2004 and EBITDA of €12 million. The Turin-headquartered company controls a national network with 24 PoPs (Points of Presence) for voice services and 42 PoPs for data services, interconnected by a fibre optic backbone and equipped to offer 11,000 IP access points across the country. Atlanet also owns MANs (Metropolitan Area Networks) in Rome, Milan and Turin. The company currently employs approximately 280 people and at 2004 year end had gross assets of about €133 million. BT will pay cash consideration of approximately €80 million.
Andy Green CEO BT Global Services, said: "BT is delighted to have been selected by such an established and respected Italian company to be its global provider, and is committed to developing a long-term partnership with Fiat that supports its transformation programme. This deal further demonstrates our continuing success in winning global contracts with leading multi-national companies across the world."
François Barrault, President BT International, said: "The services contract with Fiat and the acquisition of Atlanet validate BT's unique strategy that combines strong domestic and global capabilities; further enhancing our credibility and momentum in Italy and internationally. Less than a year after the acquisition of BT Albacom, we believe this transaction will contribute €1 billion of revenue to BT over five years and demonstrates the quality and commitment of our Italian operation under the leadership of Corrado Sciolla."
BT expects to be able to generate annual cash cost savings of €20 million by 2008, primarily through migrating traffic onto owned assets and the consolidation of networks. Atlanet will be integrated into BT's Italian operations.
The transaction is subject to regulatory approval and is expected to complete by February 2006.
BT was advised in this transaction by Vitale e Associati spa.
About BT
BT is one of the world's leading providers of communications solutions serving customers in Europe, the Americas and Asia Pacific. Its principal activities include networked IT services, local, national and international telecommunications services, and higher-value broadband and internet products and services.
BT consists principally of three lines of business:
- BT Retail, providing a comprehensive range of communications and related services to more than 20 million UK consumers and businesses.
- BT Wholesale, providing network services and solutions within the UK to more than 600 fixed and mobile operators and service providers including the provision of broadband and private circuits.
- BT Global Services, providing networked IT services to meet the needs of multi-site organisations globally. BT Global Services operates in more than 130 countries and also offers international carrier services.
From January 2006, there will be a fourth business called Openreach. This business will be responsible for the nationwide local BT network which covers the "first mile" of wires that connects homes and busine
