BT a Private Company

History

BT Logo 1991-2003
BT Logo, 1991–2003

In 1991 the company's transfer into public hands continued with the company changing it's trading name to BT on 2nd April and with the Government's sale of half it's remaining 47.6% stake in the company in December of that year. The Government's remaining remaining shares were sold in a third flotation in July 1993, raising £5 billion for the Treasury and introducing 750,000 new shareholders to the company.

During hte 1990s BT entered the Irish telecommunications market through a joint venture with the Electricity Supply Board, the Irish state owned power provider. This venture, entitled Ocean, found its main success through the launch of Ireland's first subscription-free dial-up ISP, oceanfree.net. As a telecoms company it found much less success, mainly targeting corporate customers. BT acquired 100% of this venture in 1999. Then in 2000 BT acquired Esat Telecom Group plc, and all its subsidiary companies, and Ireland On Line. It also purchased Telenor's minority shareholding in Esat Digifone. The Esat Telecom Group was split in two: the landline and internet operations were combined with Ocean and became part of BT Ignite. Esat Group was renamed Esat BT in July 2002, and eventually BT Ireland in April 2005. Esat Digifone became part of BT Wireless. EsatBT installed the first DSL lines in Ireland, and operate one exchange, in Limerick.

BT, as a cash-rich company began a series of mergers and acquisitions in the mid 1990s which began with a $1 billion joint venture with MCI Communication Corporation, the second largest carrier of long distance telecommunications services in the US. The aim of the merger being to build a network which would provide easy global connectivity to multinational corporations. The alliance advanced on 3rd November 1996 when the two companies announcement that they had entered into a full merger agreement to create a global telecommunications company to be called Concert plc, which would be incorporated in the UK with headquarters in both London and Washington DC. Though this would have BT an entry into the US market and MCI a global reach and the merger proposition gained approval from the European Commission, the US Department of Justice and the US Federal Communications Commission pressure from investors reacting to the slide in BT's share price on the London Stock Exchange forced BT to reduced its bid price for MCI. This effectively released MCI from its exclusivity clause and allowing it to begin negotiations with other interested parties. This resulted in Worldcom making a rival bid for MCI on 1st Octover 1997 which was followed by a counter bid from GTE. MCI accepted the Worldcom bid and BT pulled out of its deal with a generous severance fee of $465 million. BT made even more money when it sold its stake in MCI to Worldcom in 1998 for £4,159 million on which it made an exceptional pre-tax profit of £1,133 million. This was advised by corporate bankers, who saw the early signs of WorldCom's collapse. As part of the deal BT also bought out from MCI its 24.9 per cent interest in Concert Communications, making Concert a wholly owned part of BT.

As owner of Concert, BT still needed a partner in North America, which led to BT's courting of AT&T. By 1996 it seemed as if a deal between the two former monopolies was possible, however, former monopolies clashed in management and culture - and the alliance never really worked from the start. By late 2000 both BT and AT&T boards fell partly due to Concert's $800M of debts. Yet AT&T recognized that Concert remained a threat to its ambitions. As a result they negotiated a deal where Concert was split in two in 2001: North America and Eastern Asia went to AT&T, the rest of the world and $400M to BT. BT's remaining Concert assets were merged into its BT Ignite, later BT Global Solutions group.

As a result of these attempted acquisitions, mergers and deals (including bidding for 3G mobile telephony licenses) by 2001 BT had acquired a debt of £30Bn. As a result, in May 2001 carried out corporate Europe’s largest ever rights issue (a three for ten issue), allowing it to raise £5.9 billion. A few days before, it also sold stakes in Japan Telecom and J-Phone Communications (a mobile operator) and in Airtel of Spain to Vodafone. They also sold Yell, the international directories and associated e-commerce business for £2.14 billion.

In November 2001, BT Wireless — BT's mobile business (BT Cellnet), re-branded as mmO2 — was demerged from BT on a one for one share basis. The last day of trading in BT shares was 16 November 2001 and from 19 November, mmO2 plc and the new BT Group plc shares were traded separately. mmO2 plc was replaced by O2 plc in a further share-swap in 2005, and subsequently bought in an agreed takeover by Telefónica for £18 billion and delisted.

BT Logo 2003
BT Logo, 1991–2003

In April 2003 BT unveiled its new corporate identity and brand values which included the BT 'Connected World' logo, left. This is when the company became BT Group PLC. The Communications Act, 2003 which came into force on 25th July 2003 introduced a new industry regulator, the Office of Communications (Ofcom), to replace the Office of Telecommunications (Oftel). It also introduced a new regulatory framework.

In February 2005 acquired El Segundo a California-based telecoms giant Infonet (now re-branded BT Infonet), giving BT entry into geographies it had no presence yet. In April 2005, it bought Radianz (now rebranded as BT Radianz), which expanded BT's coverage, provided BT with more buying power in certain countries and importantly gave access to the financial markets.

At the instigation of the newly-formed OFCOM, Openreach was announced in September 2005 to provide an open and equal service of provision and repair in the "last mile" of copper wire. This business was formed from 25,000 engineers previously employed by BT's Retail and Wholesale divisions. It is designed to ensure that other communications providers (CPs) have exactly the same operational conditions as parts of the BT group. It opened for business on 11 Jan 2006.

Currently BT is investing 75% of its total capital spending, put at £10 billion over five years, in its new Internet Protocol (IP) based 21st century network (21CN). Annual savings of £1 billion per annum are expected when the transition to the new network is complete in 2010, with over 50% of its customers transferred by 2008. In October 2006 BT took a major step forward when the actual process that will be used to transfer the first customers on to 21CN was successfully tested at Adastral Park in Suffolk. Using internet protocol technology, 21CN will replace the existing networks and enable converged multimedia communications - that is communications from any device such as mobile phone, PC, PDA or home phone, to any other device.

Currently BT is a golobal telecommunications provider, operating in more than 170 countries and now almost a third of its overall revenue comes from its Global Services division. Today, the company is structured so that British Telecommunications plc (BT) is a wholly owned subsidiary which encompasses the four separately managed businesses and virtually all other assets of the BT Group. BT Group plc is listed on the stock exchanges in London and New York.