BT close to deal to transfer consumer unit to Vodafone

BT IRELAND and Vodafone are believed to be close to agreeing a deal that would involve BT’s consumer division being transferred to the mobile-phone operator.

According to informed sources, the agreement would also involve Vodafone signing a multi-year deal with BT to source wholesale fixed-line services for the mobile group.

It is understood that Vodafone will pay a small consideration for the consumer business, which is reported to be worth about €40 million.

When contacted, BT and Vodafone issued a joint statement to The Irish Times: “Vodafone Ireland and BT Ireland confirm that they are engaged in wide-ranging discussions to explore areas of joint co-operation in the Irish market with the objective of enhancing future business opportunities,” the statement said.

It is understood that the deal would involve the transfer of 50 or more BT staff to Vodafone. These are involved in sales and customer contact.

The transfer would involve BT’s residential fixed-line customers and broadband subscribers. The company has a 13 per cent share of the fixed-line market and a 9 per cent share of broadband, according to the latest statistics from ComReg.

BT’s consumer business accounts for just 6 per cent of revenues but delivered a “strong set of results”, according to the British company at the publication of its full-year results in May.

Its all-Ireland revenues were £800 million (€927 million) for the year to the end of March 2008.

Vodafone has been keen for some time to sign a wholesale deal with a fixed-line operator to allow it to expand its range of services. It is understood that Eircom has also held extensive talks with Vodafone about a wholesale fixed-line deal.

BT is expected to narrow its focus here to the Government and business market, in particular small and medium-sized enterprises. It also has a number of outsourcing contracts.

Mobile operator Telefónica O2 Ireland is outsourcing part of its network services to BT and the Department of Communications has awarded it the contract to provide the emergency 999 service.

BT employs about 1,000 staff in the Republic and about 2,500 in Northern Ireland.

In November 2007, Vodafone, which is led here by Charles Butterworth, acquired Perlico, an Irish fixed-line and broadband provider, in a deal that cost the mobile-phone company about €60 million. Vodafone is also believed to have run the rule over Smart Telecom, which is up for sale.