Proactive Investors - BT Group PLC (LON:BT) is targeting a US$500mln revenue boost from an internet-of-things (IoT) deal with Amazon (NASDAQ:AMZN) Web Services (AWS), extending its relationship with the cloud arm of the US tech giant.
It comes as analysts say the UK telecoms group is facing "tremendous competition" in its business-to-business arm from the likes of Vodafone (LON:VOD) and alt-net providers.
As a 'channel partner', the UK telecoms group will become a reseller for AWS Marketplace managed security and third party software solutions and expand 5G edge computing services.
The US$500mln target is based on UK and worldwide services over the next five years.
With its IoT platform already built on AWS, BT has provided services for customers in healthcare, transport and logistics, including work at Belfast Harbour and the Association of British Ports in Ipswich.
Analysts at Deutsche Bank (ETR:DBKGn) said leveraging its AWS relationship is a "sensible strategy" for BT, with new business likely to be at lower profit margin but a higher return on capital than currently.
"There will be ongoing legacy B2B revenue declines however with perhaps B2B line losses picking up as the group re-launches its IP migration programme from April."
The analysts said BT is "experiencing tremendous competition" in B2B from the likes of Vodafone, who can leverage similar services and technology, as well as "challenges to core connectivity" from alternative fibre-to-the-premises providers and B2B specialists such as Vorboss.
"We see higher risk vs reward for BT ve other telcos at this time."