Retreat from LatAm: Euro telco giants head homeward to think again

Major European telcos are pulling out of Latin America and seeking to achieve growth via digital transformation.

At the end of March, BT announced its intention to sell a significant portion of its Latin American operations to CIH Technology for an undisclosed sum. This signals BT's intended exit from 16 of the 28 LatAm nations it currently operates in, representing about a quarter of the 60 countries worldwide in which the telco does business. The UK's largest operator will still retain a presence in LatAm, however, with CIH agreeing to serve as a channel for BT's products and services.

"Today's announcement is a key milestone in the execution of our strategy to become a more agile and focused business," said Bas Burger, Chief Executive of Global at BT, announcing the deal.

"It comes at a particularly challenging time for the global economy. As such, it is a sign of our determination to keep the business moving forward and continue connecting communities, businesses, and governments. I am pleased to begin a new chapter in the region with CIH, providing continuity for our people and our customers."

The agreement includes the sale of two fibre networks, 2000km of leased fibre, and four data centres. Regulatory approval will be necessary and provided this is forthcoming the deal is expected to close later in the year.

BT is not alone in retreating from Latin America and refocusing on its original market. Both Deutsche Telekom and Telefonica have been doing likewise in recent months, as the large Western operators struggle to compete in the challenging markets south of the US border. Rumours circulated in January that a group of regional billionaires might bid for Telefonica's holdings in the LatAm, though no such alliance has yet disclosed itself.

Meanwhile in the UK, BT's domestic network appears to be coping well with the strains of millions of people working from home and communicating virtually with friends and family due to the coronavirus lockdown. In a statement released alongside the announcement of the Latin deal the company said that usage levels were still "well within manageable limits" and insisted that they had "plenty of headroom for it to grow still further".

‘A company for the next century'

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