BT is in talks to sell its British data centres to Hewlett-Packard (HP) for £1.5 billion in a deal that will significantly deepen its ties with the American computer giant.

The move is designed to sharpen up the profitability of its global-services division, which will come under scrutiny this Thursday when BT reports preliminary results.

The company is concentrating its global-services division on simplifying networks for corporate customers, hiving off data storage to HP, with which it has a four-year-old alliance.

The deal, which is still being worked on but should be signed in the next few weeks, will lead to BT transferring 400 staff to HP.

In exchange for the data centres, BT will take on the management of HP’s voice and data networks globally. It already runs them in Europe.

This means the pair will be bidding together for contracts on a more regular basis, though insiders played down the idea that HP and BT were moving towards an eventual merger.

Under outgoing chief executive Ben Verwaayen, global services has grown to become BT’s largest division by revenue. However, the company must still prove that it can ramp up margins from 11% to its 15% target by 2010. It hopes to do this through a mixture of maturing contracts and cost cutting.

This week’s annual results will be Verwaayen’s swansong. The Dutchman will be formally replaced by Ian Livingston, BT’s retail chief and former finance director, on June 1. BT has been reshaped around broadband access and IT services under Verwaayen’s leadership. However, investors are growing wary of the need for hefty future investment in the new networks required to carry greater volumes of data traffic.

The £1.5 billion payment from HP will leave BT relatively ungeared, with net debts standing at £10 billion in December. Investors are keen for the company to explore ways of increasing debt, perhaps by borrowing against the local-access division Open-reach, to return cash.

Like BT, HP is keen on winning more IT-services contracts in order to diversify from hardware supply and its printer business.

The alliance between the two companies has resulted in several key contracts. Most recently, the Swiss drug-maker Nycomed signed a five-year deal to outsource its IT infrastructure – HP will manage Nycomed’s data centres, while BT will offer networks, internet bandwidth and remote access for 6,500 users.

BT reported good growth at its global-services arm in February. Underlying earnings were up 14% to £579m, on sales that increased 7% to £5.6 billion, as businesses looked to make savings in a downturn by outsourcing noncore activities.

It has 24 data centres in Britain that store vast amounts of information for corporate customers, but demand has been growing exponentially, and BT acknowledges that HP is better equipped to handle the increase. The company is to sign a 10-year contract to continue using the centres.

BT also has data centres outside Britain but these are not part of the deal. HP and BT declined to comment.

Spending concerns have weighed on BT’s shares, which have fallen 19% since the start of the year and are 31% lower than at the same time last year. Goldman Sachs reduced its price target on the stock to 254p from 289p at the start of the month.

Verwaayen was the architect of the original partnership with HP, formed in 2004 with Carly Fiorina, HP’s then boss. At the time, BT took on the management of HP’s European voice and data network and call centres, while HP was to manage desktop IT infrastructure in Britain. The move foreshadowed closer links between the telecoms and computer industries. Virgin Mobile USA, a company listed on the New York Stock Exchange and part owned by Sir Richard Branson, has received an approach from Helio, a South Korean company. Helio has made a proposal to either inject its assets into Virgin Mobile or launch a full bid.

Shares in Virgin Mobile have plummetted since it floated last October at $15 a share. They were priced at $3.16 at close of play on Friday. The two telecom groups have suffered as the American mobile market has reached saturation point and more players are competing for customers.

Both mobile firms are so-called “resellers” and rent space on Sprint’s mobile network.

Virgin has targeted the lower end of the mobile market, offering cheap phones and prepaid services to first-time phone buyers and people with poor credit histories.

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