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Events in telecommunications history

1995

Oftel nominated 16 April as National Code Change day, Phoneday. The code change effectively gave every geographic number an extra "1" after the "0". Leeds, Bristol, Sheffield, Nottingham and Leicester were given new codes and new numbers were introduced to cater for future growth. The international code for calls from the UK changed from "010" to "00".

BT and BNL (Banca Nazionale del Laverno) - one of Italy's leading banks - announced in April the formation of a new joint venture company to supply specialized telecommunications services in Italy.

The new company, called Albacom, was initially owned 50.5 per cent by BT and 49.5 per cent by BNL. It combined the telecommunications activities of BNL and its communications subsidiary Multiservizi Lavoro Sud with BT's network in Italy, which already provided international and domestic managed network services.

In May 1996, Mediaset S.p.A., the media arm of Fininvest, took a 30 per cent stake in Albacom for L50 billion (£22 million), as well as merging its telecommunications activities with Albacom. BT and BNL retained the remaining 70 per cent of Albacom. To consolidate the new partnership, BT and BNL acquired a small equity stake in Mediaset for L170bn (£71 million).

Another company joined the consortium following the announcement by Albacom in July 1997 that ENI, the Italian oil and gas company, would become a major partner. ENI injected capital into Albacom, giving it a 35 per cent stake in the company. BT and BNL now jointly held 45.5 per cent (through Albacom Holdings Ltd) and Mediaset 19.5 per cent. As part of the deal the ENI group transferred its telecommunications division to Albacom which entered into a contract to provide telecommunications services to the ENI group. In addition, Albacom had the right to use ENI group's fibre optic network.

BT and German industrial group VIAG - one of Germany's ten largest companies - launched a joint venture company, Viag InterKom KG, in May to offer telecommunications services in Germany.

Headquartered in Munich, VIAG Intercom offered data communications, corporate voice, virtual private networks as well as international voice and data services from Concert, the BT and MCI global networking company. With six branches and a customer service centre in Nuremberg, the company was represented throughout Germany.

On 4 February 1997, BT and VIAG were awarded the fourth mobile licence for the E2-net in Germany. The licence was based on the high capacity DCS- 1800 standard. VIAG Intercom had also been awarded a licence the previous week to offer fixed services from 1 January 1998.

BT and VIAG announced on 6 February 1997 that Telenor - the Norwegian telecommunications operator - had agreed to join VIAG Intercom, taking a ten per cent stake in the company.

BT, Tele Danmark and the Norwegian operator Telenor launched a new telecommunications operator, Telenordia, in the Swedish market in May 1995.

Owned equally by BT, Tele Danmark and Telenor, Telenordia aimed to become the leading alternative telecommunications operator in Sweden. With full regulatory clearance from the European Union already given, the joint venture required no further legal clearance from European or Swedish authorities.

Telenordia offered global voice and data communications solutions via Concert, the global networking company at that time jointly owned by BT and MCI, as well as national data communications services, corporate and public voice services.

Interactive TV trials began with 2,500 households in Ipswich and Colchester. The service enabled customers to chose a range of services from a menu on an ordinary television set including video on demand, shopping on demand, a range of educational programming for homes and schools and a home banking service. The trial was completed in July the following year.

The trial service, which involved some 5,500 users in more than 2,000 homes, brought together the telephone and the television to enable customers to choose and order entertainment and information services from a menu on an ordinary television set.

It comprised nine main services: movies on demand; television programming on demand; children's TV; education; music videos; a community service, a home shopping and home banking service; computer games and an interactive advertising service.

On 23 June BT officially removed the last Strowger exchange from its public network at Crawford in Scotland, bringing to a close 83 years service from electro-mechanical automatic telephony. This was the latest milestone in BT's £20 billion investment in the UK's phone network - enough to build two Channel Tunnels - over the previous 11 years. In 1984 BT had inherited a network of more than 6,700 telephone exchanges, many of which were based on electro-mechanical technology developed almost 100 years previously. With the upgrade at Crawford - and also Crawfordjohn and Elvanfoot, also in Scotland, which were replaced the same day - they had all been replaced by digital or modern electronic exchanges.

New exchanges, using the most modern computerised technology, have no moving parts so they are much more reliable and provide almost instant connections and clearer conversations. All of BT's exchanges now allowed TouchTone dialling, fast call connection, fully-itemised bills, and selective pricing discount schemes, as well as per second pricing. In addition, more than 80 per cent of all customers were connected to the very latest digital exchanges, such as the new switch at Crawford. As a consequence they could enjoy a range of further services, such as Caller Display, Three-Way Calling, Call Diversion, Call Waiting, videoconferencing, and Call Minder - an answering machine service in the telephone exchange that could record incoming messages even while the phone was in use. In addition to bringing a much more reliable network and a range of new services and facilities for all of BT's customers, modernisation was accompanied by real reductions in the overall costs of telephone services.

The last TXE2 exchanges in the UK (Ballycastle in N Ireland, Llandovery in Wales and Ramsbury in England), were withdrawn from service, also on 23 June.

BT introduced per second pricing on 28 June, and was the first major telephone operator, anywhere in the world to change its entire network over to per second pricing by abolishing unit-based charging for all its customers, which had been in operation since 1958.

At the same time, BT introduced price cuts of £310 million a year. Two-thirds of the total savings - £204 million - came off the cost of local calls, with an overall 9 per cent reduction benefiting both business and residential customers. Daytime local calls made during a weekday cost 4p a minute after 28 June. Throughout Saturdays and Sundays local calls cost just 1p a minute - an average reduction of 22 per cent - subject to the 5p minimum charge. Previously, one 5p unit provided 3 minutes and 40 seconds of local call time at the cheap rate.

Residential customers would save a total of about £168 million in a year, or an average of £8.40 (ex VAT) for every customer. The savings would bring the average residential customer bill, including rental charges, down by 3.7 per cent, to £226.45 (ex VAT) a year. Call charges, excluding rentals, came down on average by 5.6 per cent.

Businesses enjoyed the remaining £142 million of reductions, an average of £22.75 (ex VAT) for every business line. The average bill for a business customer, also including rental charges, came down by 3.9 per cent to £509.50 (ex VAT) a year. The average business call bill, excluding rental, came down by 5.1 per cent.

BT public payphones continued to charge on the basis of a 10p unit, and some fixed-price calls, for example the 25p for a UK directory enquiry, and calls to some other more specialised services, were not affected by per second pricing. BT Chargecard calls used per second pricing, but different rates applied.

Since December 1993, BT had simplified charging and reduced prices by about £700 million, even before this latest reduction. These latest cuts meant that BT would have cut prices by more than £1 billion during the same period, and met its obligation to reduce prices by about £400 million in the year to July 31 1995, as agreed with the Office of Telecommunications (Oftel). Furthermore, more than £200 million of these reductions contributed towards the price cuts that BT needed to make in the year beginning on 1 August 1995, ensuring that customers would enjoy the earliest possible benefit from lower prices.

These latest price cuts meant that BT had reduced the average residential customer bill by 10 per cent since December 1993 and the average business bill had been cut by more than 13 per cent. Average call bills, excluding rentals, had fallen by 19 per cent for businesses and 17 per cent for residential customers over the same period.

Overall, bills had been reduced in real terms by 30 per cent for residential customers and 48 per cent for businesses since 1984.

A new discount scheme for business customers, BT Business Connections, was launched on 1 October. It gave a five per cent discount on direct dialled calls made to ten other numbers. It could be added to the discounts of up to 21 per cent available on BT's Business Choices Levels 1 - 5 schemes, to provide a maximum possible 26 per cent saving on the qualifying calls. There was a single joining fee of £10, excluding VAT, for each site covered. Customers could nominate which ten numbers they wished to be included for Business Connections discounts. Two could be international numbers. BT at the same time also increased the benefits of other discount schemes, Friends & FamilyBusiness Choices, PremierLine and Option 15.

A report by management consultants Touche Ross the following year showed that small to medium business customers could save over 8 per cent on their phone bills by using BT rather than its competitor Mercury through BT's various discount schemes.

Business Connections was known as Key Numbers from May 1996 following the launch of the new Business Connections nationwide sales and support team dedicated to small to medium sized businesses.

From 17 July 1997, all ten nominated numbers under the Key Numbers scheme could be international, not just two as previously.

BT launched telephone number portability between its network and those of rival companies, following technical and customer trials during the summer. This was the first full-scale implementation in the world. The facility allowed customers to retain their number when they transferred between telephone companies. Technically, the call was first sent to BT and then sent on to a rival company where appropriate.

The first BT shop opened for business on the Internet in time for Christmas 1995. By taking space at BarclaySquare, Britain's most popular Internet shopping mall, BT could keep its shop open 24 hours a day to meet the Christmas rush.

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