BT signs $500m contract with US drugs group

BT Group heralded a new chapter in its somewhat chequered history of expansion in the US by announcing a telecoms contract with Bristol-Myers Squibb, the American drugs company, which analysts believe is worth $500m (£266m).

BT refused to comment on the size of the deal but Andy Green, the chief executive of BT Global Services, said it was a "transformational" agreement that was "10 times" the size of previous telecoms projects carried out for US clients by BT.

He said BT had spent £40m in the past year establishing a presence in the US market for supplying the country's biggest companies with their own private telecoms networks to link global operations. The Bristol-Myers Squibb deal involves BT transferring the drug company's voice and data communications network to a high-speed, fibre-optic network based on the latest internet switching technology. It will link 250 locations for the company across 60 countries. Mr Green said: "This is a transformational contract win and puts us on the map in the US. It is an important milestone."

Mr Green insisted the contract was not a loss leader to help establish the BT name in the US managed services market. "We've said consistently we don't take contracts that we don't believe we can make money on," he said.

Mr Green will use the contract at the World Economic Forum in Davos, where he is attempting to persuade other large companies to migrate their private telecoms networks to BT.