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Events in telecommunications history

1997

BT acquired a significant stake in Bharti Cellular Ltd. (BCL), the largest mobile operator in India.

The BCL consortium then consisted of Bharti Group; STET of Italy; GMC - a subsidiary of CGE Group of France; Emtel - the cellular operator in Mauritius; and MSI UK.

The Indian Department of Telecommunications (DOT) had to approve BT taking over GMC, with its 22.5 per cent stake in BCL.

Oftel announced in January that code and local number changes would be required to create additional numbering capacity in London, Southampton, Portsmouth, Cardiff and Northern Ireland. These changes would take place on 22 April 2000.

Oftel's statement also identified cities and areas that could need additional capacity during the next 15 years.

In January 1998, Oftel added Coventry numbers to the list of those to be changed in 2000.

BT appointed EuroTel Bratislava as a distributor of Concert services in the Slovak Republic. EuroTel Bratislava now offered Concert Packet Services, in addition to the customer support it already provided to companies requiring international data services.

EuroTel Bratislava was a joint venture company involving Slovak Telecommunications and Atlantic West BV. BT chose the company because of its experience in the fields of international data and telecommunications services.

BT introduced further cuts to the cost of many overseas calls on 19 February, with some of the biggest reductions coming on calls to the most popular destinations, including key business routes. This meant that BT had reduced the cost of international calls by almost £170 million in just five months, following on from the introduction of the new International Weekend Rate introduced on 7 September and further reductions in October 1996.

Reductions covered calls to 33 countries, accounting for 60 per cent of all BT international calls, and included:

BT increased its stake in Airtel, the Spanish GSM mobile operator, to 15.8 per cent in March to become the second largest shareholder. It agreed to purchase the stake from Banco Santander which retained 5.5 per cent of the company.

By February 1999 BT's stake in Airtel, had risen to 17.8 per cent. The mobile communications company was Spain's second largest mobile network by this time, with more than two million customers.

BT announced on 13 March that it had teamed up with a consortium comprising Singapore Technologies Telemedia, Singapore Power, and NTT of Japan, with a view to bidding for Singapore's second telecommunications licence, to be awarded in 1998.

BT appointed Logic Telecom SA as a distributor of Concert services in Romania.

BT launched Wireplay, a nationwide dedicated computer games network which allowed players to compete with each other over the telephone network. Two or more people could play simultaneously in many of the most popular multi-player computer games.

One of the first multi media initiatives developed by BT, Wireplay allowed customers with a compatible game on their PC to access the system via a modem. Once logged on, the customer entered the Wireplay open forum and was able to challenge and play other players, or even join a league and play in teams.

First announced in September 1995, Wireplay was trialled from January 1996 by around 1500 people who were recruited to beta-test the system and the appeal of the service. The first fully compatible Wireplay game, a football game based on the Euro ‘96 tournament, was launched in June 1996.

Concert Communications launched a new offering, Concert Global Web Hosting Service, which speeded the flow of information over the Internet. It allowed businesses to host customer information on both sides of the Atlantic and brought the information closer to Internet users worldwide, speeding delivery time and easing network congestion.

The hosting service also provided powerful Intranet (‘private Internet') applications, enabling multinational businesses to distribute news and data more efficiently to employees worldwide.

The service utilised the worldwide managed Internet network that supported Concert Internet services. Concert Global Web Hosting was based on a single, globally distributed architecture as defined by Concert, which allowed consistent delivery of the same product set worldwide.

Concert Global Web Hosting was the first such service in the industry to offer a single point of contact for all technical support and customer service. Even with multiple web servers across the world, customers would gain efficiencies from having one point of contact and the convenience of a single bill in their local currency.

Initially, Concert Global Web Hosting included two products:

Concert Premium Hosting: offered customers a flexible web hosting solution on a shared server, with the ability to increase memory and bandwidth as the customer's web site grew.

BT completed its acquisition of 26 per cent in Cegetel for £1.1 billion in cash plus the share capital of BT France in late September, having made its initial investment earlier in the year. The original agreement with Compagnie Generale des Eaux was signed in September 1996. BT was CGE's main strategic partner in Cegetel. Other partners included SBC, formerly South Western Bell, and Mannesmann, the major German group. CGE was later known as Vivendi.

Cegetel's principal asset was initially its 80 per cent holding in SFR, the number two mobile operator in France with more than 2.6 million customers in June 1998 (doubled since February 1997 and more than tripled since September 1996 when it had 700,000 customers). Vodafone had a 20 per cent stake in SFR.

The new group was well positioned to be the main competitor to France Telecom. It provided the full range of telecommunications services in France, with mobile through SFR, as well as fixed services and paging.

In 1997 Cegetel won a fixed infrastructure licence, a local loop operator licence and business and residential service provider licence, in addition to its existing mobile licence. Its fixed operation provided a wide range of data and voice services to both the business and the residential market, but mainly to business customers from 1 January 1998, following the introduction of market liberalisation.

It planned to have at least 20 optical fibre loops in place to service business customers by the end of 1998. Cegetel had already rolled out three loops in Paris by June 1998, and planned to target Lille, Lyon, Marseille and Strasbourg, connecting business customers to its national fibre optic backbone. (Cegetel had previously formed a joint venture company with SNCF, the French state railway, to build a 9,000 km fibre optic national backbone network). Concert would be an integral part of the new company's portfolio, giving Cegetel a significant advantage over all other competitors.

In June 1998 Cegetel announced that it had signed an agreement with America Online (AOL), Bertelsmann and Canal+ to create the country's leading provider of on-line Internet services.

BT was selected by PTA (Post and Telekom Austria) as its strategic global partner in March. PTA was to be the distributor in Austria for Concert Communications Services which by then had in all 44 distributorships worldwide. Shortly before, MDIS the former distributor of Concert services in Austria was merged into PTA's data communications division.

PTA had been a state-owned stock company since May 1996, although privatisation was planned. The company ran the Austrian telecommunications business as well as the postal and post-bus services. With around 54,000 employees, PTA's turnover in 1996 reached more than £3 billion. The telephone customer base had reached 3.9 million lines by the end of 1996, with most connected to digital network nodes. PTA's mobile phone company - Mobilkom Austria plc - served more than 600,000 customers.

BT created 2,000 jobs in the north of England with the opening of two telemarketing centres, in Doncaster, South Yorkshire and on North Tyneside. Costing £15 million each, they opened in the autumn. Advisers employed at the sites tried to ensure that customers took full advantage of BT's products and services, including its range of pricing discount packages, thereby increasing sales.

Under a strategic agreement, between Portugal Telecom, BT and MCI, Portugal Telecom became the exclusive distributor for Concert Communications Services' voice products in Portugal, enabling it to offer the most advanced portfolio of global communications services to multinational businesses.

BT, British Sky Broadcasting Group, Midland Bank and Matsushita Electric announced on 7 May the formation of British Interactive Broadcasting Limited ("BiB"), an independent company created to deliver digital interactive services to TV viewers in the UK.

BiB was to be owned 32.5 per cent each by BSkyB and BT, 20 per cent by Midland Bank and 15 per cent by Matsushita Electric.

The shareholders agreed, subject to certain conditions, pro rata funding of £265 million to establish the technological infrastructure for these services and to provide subsidies on digital satellite set top boxes capable of receiving BiB's services. The subsidy would allow the boxes to retail at about £200. BiB was projected to be profitable after five years and would use its revenues to continue the development of its technology and the market for digital set top boxes.

BT's investment in this market was supported by the Government's announcement in April 1998 of its intention to lift the restrictions on national telecommunications companies providing broadcast services to homes over their networks from 2001. This was welcomed by BT, particularly the clarification that broadcast services delivered over the Internet would not be considered as breaching the restrictions then in force. Customers of the new multimedia services would thus reap the same benefits of competition as telecommunications customers. Such services were never envisaged when the original broadcast ban was introduced.

In May 1998, BT gave undertakings to meet the concerns of the European Commission (EC) in approving the formation of BiB. As part of the approval package proposed by BiB and its shareholders to meet the Commission's concerns, third parties would have access to the BiB-subsidised set-top boxes and the software needed to create and run interactive services.

Also within the approval package was a proposal from BT to divest itself of its broadband cable TV interests in Westminster and Milton Keynes. The EC considered that BT's control of the existing broadband delivery mechanism in these areas raised competition issues in the light of BT's participation in BiB.

BT ran a "three minutes for the price of two" special offer on calls to Australia and New Zealand for its 20 million residential customers throughout July.

The Down Under Saver special offer - making every third minute free - applied to calls which were dialled direct from BT residential phone lines during the evening, night time and weekends. It did not apply to daytime calls or to any calls made from business lines.

Savings were credited automatically, and Down Under Saver calls highlighted on itemised bills. BT's discount schemes, which gave residential customers savings of up to 25 per cent on their calls, applied on top of the Down Under Saver special prices.

A six minute weekend call which would normally cost £2.39 cost just £1.59 during July - or as little as £1.19 with BT PremierLine and Friends & Family.

A six minute evening call came down from £2.52p to £1.68p, or just £1.26 with the discounts.

BT launched Ring Me Free, a personal free-call service for residential customers on 3 July. Ring Me Free customers pay for incoming calls made by their chosen friends and relatives. Calls cost the same as if they had been dialled directly, plus a 10p set-up fee per call.

Customers could give their Ring Me Free details to whomever they chose. That other person could then call them at their home whenever they wanted to talk and not have to worry about the cost.

Customers with discount schemes such as Friends & Family and PremierLine secured the appropriate savings on all the Ring Me Free calls which they received, and on the 10p set-up fee.

Ring Me Free customers were provided with their own personal 12 digit code which they could give to those friends and relations from whom they welcomed a call.

Callers first dial a five-digit access code followed by the personal code: they did not need to dial the Ring Me Free customer's normal phone number, and they paid nothing for the call.

Ring Me Free could be used from any BT tone-dialling phone in a home or office. It did not work from BT public payphones, from mobile phones, or from outside the UK. Calls could not be made from other licensed operators' networks.

The new Labour Government relinquished in July its Special Share ("Golden Share"), retained at the time of the flotation, which had effectively given it the power to block a takeover of the company, and to appoint two non-executive directors to the Board.

Exchange line rentals were increased on 1 July. The new rentals were £26.62 per quarter for residential customers and £42.12 (£35.84 exc. VAT) for businesses. The rental changes amounted to an increase of about 1p a day, meaning bill increases of no more than the existing 2.4 per cent rate of inflation for almost all customers.

Overall, including the new rentals, the average residential bill had fallen by 3.22 per cent and the average business bill was down by 5.53 per cent since rentals last changed in July 1996.

As a result of repeated reductions, prices had fallen by more than £840 million in the year to March 31, 1997 and BT had saved customers about £2 billion in less than four years. Savings benefited both business and residential customers.

Since September 1993, the average residential bill had been brought down by more than 17 per cent in real terms and the average business bill had fallen by 27 per cent.

BT remained committed to keeping price changes for residential customers to 4.5 per cent below inflation each year until 2001. As a result, overall bills would continue to fall.

BT ran another special offer, Weekend Saver, for residential customers which cut the cost of UK calls during September. Long distance calls made from residential lines on every Saturday and Sunday in September cost just 1p a minute, the same as local calls. This was a 69 per cent reduction from the normal 3.3p a minute.

BT also ran a special offer for businesses during September. With the September Saver every local and long distance UK call made on business lines during the working day, between 8am and 6pm, Mondays to Fridays, received a 10 per cent discount on the normal price.

The various BT discount schemes for businesses gave further savings on top of September Saver.

BT introduced a new, simpler, tariff for calls made from its public payphones.

From 18 September, there were just two rates for all UK calls, local and long distance, and a single rate for calls to many international destinations.

The 10p minimum fee remained unchanged.

For each 10p unit, customers received 67 seconds of time for local calls, and 43 seconds for longer distance regional and national UK calls, at all times.

Simplification of BT payphones' international call prices also reduced charges on many routes, some by 50 per cent. From 18 September, there were also changes to the cost of credit and debit card calls made from BT payphones. All local calls were charged at 10p a minute with regional and national calls costing 20p a minute. The minimum charge remained at 50p.

BT daytime rate applied from 8am to 6pm, Monday to Friday; evening and night-time was from 6pm to 8am, Monday to Friday; weekend rate was from midnight Friday to midnight Sunday.

Both business and residential customers could take advantage of another BT promotion by having a second phone line installed for half the usual price from 1 October to 31 December.

The special offer applied to the second line provided at the same address. During this period customers could have a second line installed for just £58.16 instead of £116.33 (£49.50 instead of £99 excluding VAT).

The special offer would cut the cost of phone connections for companies which were looking to expand and to improve their service to customers. BT estimated that nearly one in every four calls to businesses did not get through, often because someone was already on the phone. A second line could turn failed calls into successful sales. For families, a second line meant that other members could have access to their own phone.

BT introduced its first ever electronic payment option on 18 September for residential customers - the BT Payment Card. The card was designed for use with the new national bill payment network, PayPoint, which was also launched earlier this month.

The BT Payment Card allowed customers to pay money towards their bills in corner shops, filling stations, newsagents and a host of other local outlets as well as through most post offices and BT shops. The card was swiped through a terminal and the amount paid towards the bill registered. A receipt confirmed the amount.

BT sent application forms to millions of customers over the following months, on a region by region basis. A successful trial of the BT Payment Card and the PayPoint network was run in Northern Ireland the previous year.

The card was particularly targeted at the UK's four million households, out of a total of 23 million, that only used cash to pay their phone bills, as well as for those without a bank account.

Concert Communications Services launched Remote Internet Access on 18 September. This new service provided remote users and business travellers with secure global access to the Internet, and Internet-connected LANs and Intranets, at intra-country rates.

It offered significant savings and eliminated the need for expensive international calls to access domestic networks remotely.

Remote Internet Access was available initially via more than 800 points-of-presence in 50 countries. It represented a versatile global value-added service for Internet service providers and multinational customers, who wanted to extend their network capabilities internationally without investing in additional infrastructure.

In conjunction with Concert Internetplus Service, launched in June 1996, it allowed remote offices and mobile workers to connect to their corporate networks via the Internet or simply to access information from the World Wide Web.

BT introduced a new European compliant version of ISDN 2, its high speed digital communications service, from 13 October. ISDN 2e became BT's standard offering for all new provision of ISDN 2 'basic rate' lines. ISDN 2e interworked with BT's existing ISDN 2 service for both voice and data calls. Customers of ISDN 2 would continue to be supported for as long as they wanted the service.

ISDN 2e complied with the latest European standard and was designed to encourage further the introduction of low cost European customer premises equipment into the UK. New features of ISDN 2e available at launch included a multiple subscriber numbering option (MSN), allowing customers to choose from two, three, eight or ten numbers on each line and a new BT-assisted call forwarding facility for both voice and data calls.

The ISDN 2 and ISDN 2e services were fully compatible for voice and data calls: both offered a digital line comprising two 64Kbps channels into customer premises and supported many applications including file transfer and video conferencing as well as Internet access and voice calls. In fact, both complied with international standard 1420, but ISDN 2 was introduced before the completion of the latest European ISDN standards. As a result, small technical differences existed between the two, which was removed by the introduction of ISDN 2e.

Future planned developments for ISDN 2e included call waiting for four calls at a time, call hold, customer control of call forwarding and call deflection - a service by which calls could be forwarded depending on their calling line identities.

Initially, there was little difference between the two services and the ISDN2 continued to represent value for money. Customers who wished to upgrade, however, were able to do so at a cost of £80 per connection. This charge contributed towards the actual cost of upgrading the customer's line.

BT announced on 10 November 1997 its intention to sell its stake in MCI to the US company Worldcom for $7 billion. This followed Worldcom's successful rival bid for MCI on 1 October. Worldcom's offer, which was followed on 15 October by an unsuccessful counter bid from GTE, America's largest US based local telecommunications company, was made after BT and MCI had renegotiated the terms of the planned merger following a profits warning from MCI in July 1997.

BT announced in November that it planned to license its trademark Gilbert Scott K6 payphone kiosk for use by competitors. The move was to promote competition where planning requirements by local authorities prevented other operators siting their modern kiosks. Licences were issued on condition that the operators used a colour other than red, and that it was evident that an operator other than BT was providing the service.

BT was previously reluctant to allow use of the K6 design by other operators because of its strong association with the company and because the kiosk provided restricted access for customers with disabilities.

Following a dispute with a competitor in 1996, BT introduced a policy of site swapping. If another provider wished to install payphones in areas where local planning authorities insisted on the K6 design, BT offered the other operator one of its nearby existing non-K6 sites instead. The first site swapping agreement was established between BT and New World Payphones in October 1996.

BT and the Republic of Ireland company Electricity Supply Board (ESB) announced on 9 December that they had reached agreement in principle to form a joint venture to offer communications services in Ireland, Western Europe's fastest growing economy.

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