BT is expanding its European base with a joint venture with a major Irish utility, to provide corporate services.
The company, equally owned with the 70-year old Electricity Supply Board, will offer communications services, initially to the corporate market, and will commence operations next summer. A spokesperson for ESB said the venture would have a name and clearer plans by the end of January.
During the first five years, the partners will invest #75 million in the company, rising to #130 million over the following 10. "It is expected that the joint venture will employ core staff from BT and ESB, and in the future will employ more of its own staff," said the spokesperson.
There is also a possibility of moving into consumer telecomms services. "Whether we expand our services to the consumer market is tied into the liberalisation of the telecomms market. It should be open to all in the year 2000, so hopefully we will," said ESB. The deregulation of the EU telecomms market is the main spur for telcos to seek ventures such as this one outside their domestic territory.
IT analyst Deborah McCutcheon sees the Irish venture as part of a Europe-wide plan. "BT is very keen on being a major force in Europe and this is consistent with that plan. BT has telecomms experience, so is most likely to be the technical leader."
This will certainly not be BT's last such move in Europe and it admits it plans to announce more joint ventures in the near future. It currently has alliances in every EU country except Belgium, where it has a wholly owned subsidiary. It recently signed agreements with Cegetel in France, Viag Intercom in Germany and Abercom in Italy. A BT representative said: "We are happy with Belgium operations but we may sign another deal there in the future."
Alliances between telcos and utilities are increasingly popular, as incoming telecomms providers seek to take advantage of an entrenched utility's nationwide network and customer contacts.
Worldwide, BT has operations in 30 countries including the US and Japan.
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