Cellnet, the British Telecom and Securicor joint venture cellular radio service, was launched on 7 January. It replaced the existing radiophone service operated by British Telecom. Its competitor Racal Vodafone was also launched the same year.
The joint venture company was relaunched as BT Cellnet in 1999. In July 1999 BT announced it would be acquiring Securicor's minority stake in the joint venture.
The first new-style British Telecom shop opened in Southend-on-Sea High Street on 3 January, selling a wide range of telephones, business equipment and telephone accessories. The new shop was an extension of the existing chain of 53 phoneshops, mostly sited in department stores or in local telephone area offices.
The new speaking clock was inaugurated at 11 o'clock on 2 April when the voice of Brian Cobby replaced that of Pat Simmons, the voice of the clock for the previous 22 years. The new clock was digital and, with no moving parts, more reliable and accurate than the old equipment.
From 1 November it was possible to rent an exchange line alone from BT without having to pay rental for a telephone instrument.
Modernisation of the trunk network began with the opening of 'System X' exchanges in Birmingham, Coventry, Leeds and the City of London. The initial phase of the modernisation was completed in November 1988 with the opening of the 53rd 'System X' trunk exchange in Norwich. The last analogue trunk exchange at Thurso, Scotland was closed in July 1990 and the BT long-distance network thereby became totally digital, the first major system in the world to do so.
The first Stored Programme Control telex inland exchange was opened.
The first UK operational undersea optical fibre cable was laid, linking the Isle of Wight to the mainland across the Solent.
British Telecom trialled its first Integrated Services Digital Network (ISDN).
Trials of the Linkline 0800 and 0345 services began on 12 November. An International 0800 service was opened from the United States.
Linkline was later marketed as Freefone and Lo-Call.
The Martlesham switched star cable TV and interactive services network was introduced in Westminster.
British Telecom placed an order for around £100 million in March for an AXE 10 (System Y) digital switching system to provide a competitive alternative to System X. The contract was awarded through Thorn Ericsson.
The first AXE 10 exchange was opened the following year at Sevenoaks. As well as being an alternative to System X, introduction of AXE 10 exchanges into the network allowed the modernisation programme of the network to be speeded up. AXE 10 exchanges provided the same range of extra facilities known as Star Services (later known as Select Services) as Systems X, including code calling, repeat last call, three way calling, call diversion, call waiting, call barring, reminder call and charge advice.
A £160 million payphone investment programme was launched. As part of the modernisation the new generation of telephone kiosks began to appear, the KX 100 - 400 series. The first of these new-style booths was unveiled in London's Leicester Square. They were cheaper to maintain, more resistant to vandalism and were designed to blend in with any surroundings. Special attention was paid to environmental considerations, acoustics, weather protection, lighting and ventilation after intensive market research was conducted into customers' needs. Constructed in a variety of designs they were hardwearing and contained paint-free finishes of anodised aluminium and stainless steel. They were also fitted with sound proofing, vandal-resistant panelling and improved lighting. The designs assisted customers with disabilities and allowed access to wheelchair users.
The modernisation programme was completed in 1988. The UK's public payphone system had not been amongst the most efficient in the world, but in the 1988 Quality of Service report it was listed as having a 96 per cent reliability. This success rate continued, compared to only 72 per cent in 1987. As a result of the programme, there were 80,000 of the stainless steel design kiosks in service by 1996, in addition to 30,000 hooded/canopied phones in locations such as railway stations or shopping centres and 15,000 old style red boxes in heritage sites.
BT introduced a new design in 1996, the KX + range, following widespread research into public opinion, and which built on the successful features of the stainless steel kiosks.
In 1999, BT operated a network of 137,000 public payphones of various designs across the UK, compared to 81,000 ten years previously, with an average of 5,000 new units being installed each year.
Britain's first credit-card-operated public payphone was introduced. Creditcall, like the Phonecard, was another cashless payphone service, enabling customers to make calls using major credit cards. It was installed on a trial basis in London at Heathrow Airport and Waterloo BR station.
BT Japan was set up to represent BT's corporate interests in Japan (BT is listed on the Tokyo Stock Exchange). BT Japan managed BT's relations with Japanese carriers, press and governmental authorities. It was also responsible for new business development activity and for sales of systems and services to the financial community. In 1998 it contributed to the creation of BT Communications Services, the BT / Marubeni joint venture company in Japan.
Teletex, a new automatic high speed message transmission service, was inaugurated on 11 April.
The Singapore office of British Telecom was opened.
British Telecom acquired CTB Inc.
The Message Master radiopager was launched. It was the first pager with a mini screen for written messages.