BT Group Plc has won a five-year deal worth 450m euros ($536.4m) with Italian automotive giant Fiat Group.
Under the terms of the deal, BT will manage Fiat’s telecoms services in 40 countries. BT will also acquire Atlanet SpA, Fiat’s domestic telecoms subsidiary, for approximately 80m euros ($95.4m) in cash.
Turin, Italy-based Atlanet operates a national network with 11,000 IP access points, as well as metropolitan area networks in Rome, Milan, and Turin. The company employs about 280 people, and reported revenue of 155m euros ($184.8m) in the year to December 2004.
BT expects Atlanet to contribute revenue of 1bn euros ($1.2bn) over the next five years. The deal further strengthens BT’s position in Italy, following its acquisition of local network operator Albacom 12 months ago.
According to a BT spokesperson, the new deal will only cover telecommunications services, and therefore will not affect Fiat’s existing long-term contract with IBM Global Services. Back in May 2001, IBM held off EDS to win an IT outsourcing deal with Fiat worth $600m annually for a maximum of 10 years.
In July this year, however, this deal was replaced with a scaled-down contract, now worth 200m euros ($238.4m) annually to IBM over nine years. Under the new contract, IBM was tasked with redesigning Fiat’s IT infrastructure through hardware consolidation and optimization, standardizing the platform to an ‘on demand’ computing environment at Fiat’s delivery center in Turin.
Fiat has struggled in recent years, largely due to the increasingly competitive nature of the automotive industry. In full-year 2004, the company made a net loss of 1.6bn euros ($1.9bn) on revenue that fell 3% to 48.8bn euros ($58.2bn).
The deal caps a busy year for BT in the IT services space. The company has made a number of acquisitions including Cara Group, Total Network Solutions Ltd, Infonet Services Corp, and Reuters offshoot Radianz, and signed major services deals with the UK Ministry of Defense, Reuters, and Barclays Plc.