BT raises the Brexit drawbridge, puts its foreign bits up for sale

• Bringing it all back home
• A right little, tight little telco for a right little, tight little island
• A focus, at last, on 'superfast' fibre rollout for bandwidth-starved Brits
• But that costs a lot of money and so "everything outside the UK" is up for sale

Late last week rumours began to circulate to the effect that the UK's incumbent telco, BT, is to dispose of all its overseas assets - "everything outside the UK" - in a Brexit-based (or at least Brexit occasioned and inspired) 'strategy' that involves pulling up the drawbridge and turning its back on the world beyond the White Cliffs of Dover in an effort to save money and boost its languishing share price. Currently BT has assets in 60 countries worldwide.

Just last week BT cut its historic connection with the square mile of the City of London when it sold its headquarters at 81 Newgate Street, hard by St Paul's Cathedral. It raised £210 million, a drop in the bucket of what will be needed if BT is to recover lost ground and investor confidence to the extent that it's stock price might improve after three years in the doldrums. The BT Centre was bought by the Orion European Real Estate Fund and a clause in the agreement will permit BT to lease back its old offices for up to two and a half years whilst it looks around for a new HQ. There should be plenty of places available by the beginning of 2022. 

Even before the sale of BT Centre, the telco had already signalled its intention to focus on its home market as the long drawn-out saga of the accounting scandal at its Italian arm dragged on and battered the share price. The telco was forced to write down an initial £530 million in the value of its Italian holdings and it hit the company hard. BT's international business, Global Services, found itself in the limelight for all the wrong reasons and the first straws were in the wind whipped past the sixth floor executive suites when the operator announced that it would sell its profitable corporate services division in Ireland, BT Ireland, for $400 million and would also divest itself of BT España.

And now a full-on, Force 9 reconstruction gale is blowing not just straws but tumbleweeds, chaff and chunks of giant haystacks into the well-oiled revolving door that is the main entrance to BT Group Plc. When erstwhile CEO Gavin Patterson finally buttoned-up his shirt against the cold and left the building back in February, new broom Philip Jansen took over and began, as he obviously means to continue, by putting various parts of BT's overseas holdings up for sale. The latest step is to sell BT's entire Latin American assets, valued at not far south of £1 billion

So, the days of expansion and freebooting empire-building seem to be over for BT as it sells-up and focuses on a highly competitive home market where, despite legacy advantages that are a hangover from its long years as a monopoly provider of telecoms services prior to privatisation in the mid-1980s, it remains largely unloved by subscribers and investors alike.

Still dealing with the legacy of the cold dead hand of Openreach

The telco faces particularly heavy criticism for its approach to the nationwide roll-out and provision of high-speed broadband which, for years on end, has been perceived as languid, lazy and characterised by deliberate and determined under-investment in BT Openreach, the division that maintains the cables, ducts, cabinets and telephone exchanges that connect the vast majority of UK homes and businesses to the national broadband and telecoms network.

For the past 15 years Openreach has been pilloried by the press and customers alike for abusing its monopoly position, its miserable broadband access speeds and attempts to stifle competition in Britain's Internet infrastructure. Prima facie evidence came in 2016 when it emerged that 35 per cent of BT's operating profit came directly from the Openreach division thanks to underinvestment in broadband infrastructure, excessive pricing and dreadful customer service.

It was only in March 2017, after putting up fierce rearguard opposition, that political pressure and (at long last meaningful) intervention by the UK regulator Ofcom that the telco was finally forced to divest itself of Openreach and spin it out into a separate company.

At BT's recent AGM Philip Jansen publicly pledged that BT will invest heavily in the roll-out of fibre-optic high-speed 'superfast' broadband Internet infrastructure and will connect 15 million homes by 2025. To meet that promise he'll have to raise cash (by selling overseas assets) whilst simultaneously cutting costs (which probably means another round or more of job losses). Philip Jansen also indicated that it might be necessary to cut dividends, which is something investors will be very anxious about having seen the value of their shareholdings remorselessly dwindle since early in 2016.