BT Group and KDDI Corporation will on Monday unveil plans for a joint venture that will enable them to provide and manage global communications networks for leading Japanese companies.
The collaboration aims to generate revenues of $1bn within three to five years and underlines how BT Global Services, which supplies private networks and related information technology to multinational companies, has become the UK telecoms company’s growth engine.
No money is changing hands between BT and KDDI, Japan’s second biggest telecoms company. The joint venture, due to be launched in August, will provide and manage voice and data networks for leading Japanese companies and their operations across the world.
BT has been seeking to re-establish itself as a major force in Japan after selling its minority stake in Japan Telecom to Vodafone in 2001.
The new joint venture will give BT access to KDDI’s Japanese customers. KDDI will gain from the ability to offer customers access to BT’s global networks.
Tadashi Onodera, the president of KDDI, said: “A current trend of our customers is to move towards contracting for global solutions to satisfy their network and information technology needs.”
Andy Green, chief executive of BT Global Services, justified the joint venture partly on the grounds that Japanese companies wanted to deal with a domestic telecoms provider.
He said the collaboration would involve “BT bringing its global capabilities and
proven outsourcing track record, and KDDI contributing local relationships”.
BT has a mixed history of forming alliances with companies. Concert, a joint venture between BT and AT&T, the US telecoms company, was created in 2000 to serve the needs of multinationals, but was unwound in 2001 after sustaining heavy losses.
Concert was seen as a potential first step to a merger between BT and AT&T, but the joint venture ran into difficulties partly because it did not gain sufficient support from directors at the two companies.
Mr Green stressed how Mr Onodera and Sir Christopher Bland, the chairman of BT, had been closely involved in planning for the new joint venture. “We are confident this is going to be a success,” he said.
BT Global Services strengthened its presence in the US after the acquisition of Infonet, a US provider of voice and data networks to companies, in 2004.
BT reported group revenues of £19.5bn for its 2006 fiscal year. BT Global Services recorded revenues of £8.6bn in 2006, up 15 per cent on 2005.
BT Global Services could generate more than 50 per cent of BT group revenues during 2007.