BT sells fleet management business and diversification opportunity

Just as almost every telco is searching for new ways to diversify and target non-core revenues, BT has decided to sell its Fleet Solutions business unit.

Financial details of the transaction have not been unveiled, but asset management group Aurelius have purchased the fleet management services business from BT. The telco has suggested the transaction will enable the team to focus investments and attention on more core activities. However, this divestment seems to fly in the face of trends, with telcos looking to secure additional revenues beyond the traditional.

“The acquisition of BT Fleet Solutions by Aurelius is an exciting and significant step forward in its development and will deliver for its customers, people and the BT Group,” said Gerry McQuade, CEO of BT’s Enterprise unit.

“Over the past five years, our Fleet business has grown into a multi-award-winning market leader in the sector. The unrivalled expertise and experience of its people in managing and maintaining complex fleets has been key to this success.”

With 65 in-house garages, 500 partner facilities and 950 employees, BT Fleet Solutions manages more than 80,000 vehicles for over 26 blue chip customers across the UK. Although this is business which is far removed from the core business of telecommunications, it could have been viewed as a path for the telco to offer services above and beyond traditional enterprise connectivity, especially as more fleets look to IOT to manage operations more effectively.

Fleet management is an area which has been suggested as one which could benefit from the spreading wings of connectivity and the blossoming world of IOT. More vehicles are being connected and monitored year-on-year, presenting an opportunity for telcos to expand revenues and expertise beyond traditional battle-grounds. This is where we are slightly confused by the transaction.

Of course, fleet management is more than connectivity. The nuts and bolts of the business are nuts and bolts, a completely different segment than where BT’s heritage lies. However, this was a foot in the door, an established presence in an enterprise vertical which the connectivity business could build on and offer customised solutions. Telcos are looking for ways and means to validate connectivity in new applications and services, and this could have been a way to do so.

However, it does seem the telco is doubling down on core business activities as opposed to exploring new options to diversify.

“With BT’s renewed focus on investing in the best fixed and mobile networks in the UK, and with BT Fleet Solutions well positioned to achieve further growth, the time is right for the business to find a new home,” said McQuade.

This is where the transaction becomes more understandable. BT, and all the other telcos for that matter, are under considerable pressure to boost the connectivity foundations of the UK. Money will have to be spent on deploying new infrastructure, both fixed and mobile, to ensure networks can meet the standards set forth by ambitious government targets. You only have to look at Prime Minister Boris Johnson’s recent objective of 100% full-fibre coverage by 2025, potentially cutting eight years off previous targets, to understand this pressure.

We understand the short- and mid- terms demands on BT, as well as the financial pressures it is currently facing, however we can’t help but feel this is a missed opportunity.

Telcos are searching for ways to engage the verticals with solutions which go beyond traditional connectivity solutions, and the BT Fleet Solutions business unit looked to be the perfect foundations to aggressively seek new revenues with customisable solutions built on IOT, AI and edge computing.