BT linked to US acquisition

Telecoms group BT was today being linked to a surprise return to the US market after a report said it was about to make a $1bn (€771m) acquisition.

The swoop for California-based telecoms service provider Infonet Services comes three years after BT scrapped a joint venture with US group AT&T.

The Sunday Telegraph said BT was expected to pay a 30% premium for Infonet, which boasts a list of blue-chip customers including Hewlett-Packard.

It is thought that BT wants the acquisition, which will cost it in the region of $1bn (£542m/€771m), in order to boost its presence in data services and network security products.

Infonet is owned by a number of telecoms companies, including KDDI of Japan, Dutch group KPN and Spanish giant Telefonica. A takeover would require the approval of the US government as Infonet works for the Pentagon, the report said.

Under a previous management team, BT took a £1.2bn (€1.7bn) blow to its balance sheet by shutting the heavily loss-making Concert venture it ran with AT&T. The business was aimed at serving large multi-national business customers but struggled in a changing market place and amid strong price competition.

BT declined to comment on the report, which emerged just days before the company is due to unveil figures for the first six months of its financial year.

Strong broadband growth is again expected to counter the decline in the traditional fixed-line business, although fund manager Gerrard expects half-year profits to dip to £934m (€1.3bn) from £1.03bn (€1.5bn) a year ago.

The period will include the first impact of a reduction in termination rates - the price that mobile phone firms charge each other and landline operators for putting callers through to their customers.

In addition, BT is facing a potential challenge from regulator Ofcom, which is considering a break-up of the company as part of a strategic review of the telecoms sector.