BT Archives


Events in Telecommunications History

1998

 

BT Key Countries was launched on 1 January, a new discount package which gave a 15 per cent discount on existing prices - BT basic prices or those already benefiting from BT's discounts. Customers could nominate up to 10 countries from a choice of 30 of the main international destinations for UK businesses.

Key Countries gave substantial savings on basic prices combined with BT's existing Business Choices and Key Numbers discount schemes. It cost £7.50 per quarter for each nominated country - or £25 per quarter for a package of five countries.

On 1 January, BT also introduced Friends & Family Country Calling Plans to give residential customers even bigger savings on calls to many countries. This scheme was aimed at residential customers who spent more than £5 a month on direct dialled calls to a particular country. For a fee of just £1 a month, customers could save 25 per cent on calls to a country of their choice at all times. Customers could nominate up to five countries, paying the £1 monthly fee for each country. The saving could be combined with PremierLine and Friends & Family schemes to give discounts of more than 43 per cent on BT basic prices, for qualifying calls.

Daytime calls to Japan were brought down on 1 January by 12.3 per cent from 77p a minute to 67.5p; evening and night time calls came down by 21.7 per cent, from 73.2p per minute to 57.3p; and weekend calls came down by 21.8 per cent from 69.5p to 54.3p per minute.

Also from 1 January, the basic cost of weekend calls to BT's International Charge Band 1a, which covered France, Belgium, Denmark, Liechtenstein, Luxembourg, the Netherlands, Sweden, Switzerland and Germany, came down from 23.4p to 23.2p per minute, a 1.1 per cent reduction.

Weekend calls to Australia and New Zealand in Charge Band 6 came down from 39.7 to 39.2p - or 1.4 per cent.

BT also ran a special offer on weekday calls to Australia and New Zealand throughout September this year, with savings of up to 40 per cent on the basic price for its residential customers. All calls made on Mondays to Fridays during the month cost 30p per minute at BT's basic rate - saving 40 per cent on the normal daytime price of 49p per minute and 30 per cent on the evening and night-time rate of 42p per minute.

For customers taking advantage of BT's Friends & Family and PremierLine discounts the price came down to 22p per minute.

BT announced in January accelerated investment plans of more than £200 million to boost capacity and further improve service in its fast-growing inbound telephone services such as 0800, 0345 and 0990. These are numbers were used by companies to make it easier for their customers to contact them.

Resumption of normal business on 5 January 1998 after a two-week break for most of the UK, combined with widespread gale damage and flooding, resulted in four times the usual number of calls on these lines and many callers were unable to get through in the normal way. BT wrote to companies affected, inviting them to be involved in BT plans to develop technical features, provide extra capacity and add safeguards to the system. BT planned a £110 million investment over the next financial year alone, introducing measures aimed at ensuring that service would not be affected in the same way if ever such exceptional circumstances occurred again.

BT cut 10 per cent off the cost of long distance calls made within the UK at weekends on 17 January. This reduced the cost of a weekend long distance regional or national call from 3.3p to 3p per minute, incl. VAT. This cost was further reduced with BT discount schemes. This reduction in UK call charges was the latest of several introduced over the previous few years (see 1996 entry).

The final stage of the Reading code and number change took on 9 January. From that time phone users had to dial the new code (0118) and add a 9 to the beginning of all six-digit Reading numbers. Both old and new number systems had been running in parallel since April 1996, giving customers almost two years to make the necessary changes to their telephone equipment, stationery, signs and vehicle liveries. The changes had been introduced by the telecommunications industry to accommodate the rapid increase in demand for numbers in the Reading area, running at about three times the national average. They increased the capacity of Reading area phone numbers tenfold.

Later in January Oftel announced that changes would be required to numbers in the Coventry 01203 area to cater for demand. On 22 April 2000, Coventry's 01203 dialling code was to change to 024, and "76" would be added to the front of existing six digit local numbers. This meant that Coventry 01203 123456 would become 024 7612 3456.

BT launched a pay-as-you-go service called BT Click for less frequent Internet users. The service was subscription free, and customers were charged for access at local call rates, plus one penny per minute.

In February 1999, BT launched a revised pay-as-you-go service called BT ClickFree, the only free UK Internet service which required no registration. Customers could access the Internet simply and easily when they chose, paying only the cost of a local call or less if they belonged to one of BT's call discount schemes, such as Friends & Family and PremierLine. BT also teamed up with Value Direct to give BT ClickFree users the ability to shop online for a range of products at lower prices than through any other access service or traditional high street retailer. BT ClickFree included information and entertainment content from Excite, the US based global Internet media company. (BT had secured for $10 million a fifty per cent stake in 1998 in Excite's subsidiary, Excite UK). Also included was BT's free e-mail address service, talk21, which was upgraded to POP3 in March 1999 to allow users to read and write e-mails offline.

A £300 million network modernisation programme to support the rapid growth in Internet and data communications services was announced by BT on 2 February. These services are expected to account for about 90 per cent of all corporate communications traffic by the year 2003. This investment would be used to develop and expand BT's existing high-speed, high-capacity broadband multi-service network. BT already had the biggest network of this kind in Europe, offering high-speed services to the finance, retail, IT, education, manufacturing and media sectors. This investment enabled BT to continue leading the implementation of a national broadband infrastructure for the integration of voice, data and video applications over a single network . BT would create a common multi-service broadband network to meet demand by business and residential customers up to the millennium and beyond. It would use the latest ATM (Asynchronous Transfer Mode) technology, and was an expansion of BT's high-speed CellStream service - the UK's first national ATM service.

Building on ATM experience gained since the launch of the CellStream service in June 1996, BT planned to invest in growing and developing that network to support its existing and future broadband communications services. Among the first services to be migrated onto this multi-service network were to be BT's first broadband data service - Switched Multi-megabit Data Service (SMDS) - to be followed by Frame Relay as well as BT's range of Internet products and services. By delivering many products and services from a single managed network infrastructure, BT would be able to respond more quickly to changes in customer demand between the existing products, as well as reducing its ‘time to market' for future services and capabilities.

A further £800 million network expansion programme to meet the expected increase in demand for data communications and Internet services was announced by BT on 13 May. This investment in the latest communications transmission equipment was on top of the £300 million investment announced in February for sophisticated switching equipment. These two elements would enable BT's core network to meet the demands of the emerging information society for ‘next generation' Internet, Intranet and multimedia services. It would support new applications such as electronic trading, mobile and broadband data integration and digital broadcasting.

The rapid growth in the use of Internet, company Intranets and multimedia services in the business and residential markets from the early 1990s was the direct cause of these investments. In announcing this latest investment, BT stated that it expected the volume of traffic generated by the UK multimedia market, including Internet distribution and service provision, to start to match the number of telephone calls by the year 2003.

The £800 million was to be used to extend significantly the reach of BT's core Synchronous Digital Hierarchy (SDH) optical fibre transmission network and exploit emerging Dense Wave Divisional multiplexing (DWDM) technology. These technologies enabled BT to increase the capacity of its core network almost without limit. BT already had the biggest network of this kind in the UK and Europe. The UK core network carried data communications up to 124 gigabits in 1998, and comprised three and half million kilometres of optical fibres, the highest amount of fibre per customer in Europe.

The investment programme announcement featured three distinct technologies;

Synchronous Digital Hierarchy (SDH)

BT pioneered the introduction of SDH in 1993 and by 1998 had the UK's largest SDH network with more than 400 nodes carrying private circuits, Internet Protocol (IP) traffic and other data services.

SDH was the new world standard for digital transmission used in core communications networks over which broadband, video, data and voice services run. It provided reliable and responsive transmission network infrastructure for broadband traffic. SDH networks could repair themselves in the event of a fault, and could be more easily re-configured in event of failure, enabling BT to provide a more flexible and reliable service to its customers.

SDH technology also provided a more reliable and responsive transmission system and, as a result, a customer was unlikely to experience a network fault more than once every ten years depending on configuration.

The planned investment would more than treble the deployment of SDH with the installation of an additional 1,000 nodes. This would allow BT to continue to provide businesses with high-speed communications services to many more locations as well as support advanced access services to the home.

Wave Divisional/Dense Wave Divisional Multiplexing (WDM/DWDM)

WDM/DWDM uses multiple wavelengths, or colours of light, to carry many channels of digital information at once over each physical fibre, providing a huge increase in bandwidth. BT was already taking full advantage of the huge opportunities provided by this technology in its existing network.

Asynchronous Transfer Mode (ATM)

This latest investment was over and above the £300 million BT announced in February 1998, which was targeted at developing and enhancing BT's ATM-based Multi-Service Network. It gave BT the ability to switch Internet and data communications services carried by the SDH network direct to customers' premises without loss of speed.

Since privatisation, BT had invested more than £30 billion in its network and led the way in providing innovative telecommunications services for customers. Together with earlier investments in optical fibre and digital communications equipment, BT's core network would be able to carry a massive number of voice, data and Internet calls. The network would grow to offer transmission speeds at hundreds of gigabits per second - equivalent to millions of simultaneous voice, data and Internet calls. It would lead to the introduction of intelligent applications, so the network would start to do things for customers automatically. For example, it could book domestic appointments, or make flight reservations.

BT announced further network development on 3 February 1999. It revealed that BeTaNet, an advanced Internetworking Protocol (IP) and multimedia network, was now operational, and that services would be rolled out over the next few months.

BeTaNet enhanced the functionality of BT's already extensive fibre optic network. It would offer customers virtually unlimited bandwidth over a single link for simultaneous voice, data, video and Internet services. Supporting services such as electronic commerce and business, digital broadcasting, interactive call centres and new Intranet-based solutions for commercial and industrial customers, it was to be fully integrated with more than 20,000 existing fibre nodes, with over 300 more being added each month.

BeTaNet, compatible with the conventional telephone network, was a product of major investments in advanced switching and transmission equipment. BT announced further investment plans for £5 billion over the next five years from 1999 for extensions and enhancements to support data and multimedia services, in addition to the more than £1.1 billion in related investment that had been announced during 1998. Together with its advanced European high capacity network, which BT built with its European partners during 1998 and 1999 (see separate entry this year), BeTaNet was to create the platform for one of the most up to date and extensive data communications networks.

Over time, the need for multiple telephone lines and separate high-speed data networks would be reduced, and a wide range of multimedia services such as Intranets, electronic commerce, voice-over-IP, interactive television and broadband data would all be delivered in an integrated format.

Like the pan European network announced in 1998, the BeTaNet network was based on leading-edge Synchronous Digital Hierarchy (SDH) and dense wave division multiplexing (DWDM) technologies. Until now investment in SDH had been in the core of BT's UK network, but this new network forged the crucial link that would bring SDH within the reach of most business customers. It was expected to enable BT to provide and manage resilient, high-bandwidth services based on IP protocols direct to 98 per cent of UK businesses over a single connection.

When integrated with the Asymmetric Digital Subscriber Line (ADSL) broadband access being deployed in West London in 1998 and 1999 (see separate entry this year), this technology would bring broadband communications within reach of most residential customers. It would form a key part of the future broadband platform for BT's access network, which would meet growing customer demand for access to higher capacity networks and higher speed services.

Network investment to meet the explosive demand for high-speed data services continued in 1998 with the announcement from BT and its European partners on 12 June that they were to combine to form the largest pan-European communications network. By connecting the in-country networks and using the latest technology, BT, Concert Communications Services, the global services company, and their European partners would enjoy substantial operating efficiencies and economies of scale. They would also be able to offer their customers a new range of multimedia services such as high-speed private circuits, Internet backbones, Intranets and enhanced broadcast services.

In February 1999, BT and its European partners revealed that the pan-European communications network was undergoing stringent trials, and on 11 March 1999 they began carrying live customer traffic over the 45,000 km network. At launch, seven European operators - BT, Albacom (Italy), BT Belgium, Sunrise (Switzerland), Telfort (Netherlands), Viag Interkom (Germany) and Cegetel/Telecom Developpement (France) - had linked their networks. In less than eight months, BT and its partners had implemented more than 9,000 km of fibre, connecting the 36,000 km of fibre within the networks of BT's family of operating alliances to form Europe's biggest transborder network. Phase two of the network build would include roll-out in Ireland, Spain and the Nordics, and phase three would extend to Southern and Eastern Europe. Through the deployment of Nortel (Northern Telecom) SDH and DWDM technology, the network would be optimised to deliver 160Gbit/s of capacity per fibre pair with the ability to increase transmission to 320Gbit/s in the future.

BT announced on 10 February that it intended to be the first European communications company to join the Universal ADSL (Asymmetric Digital Subscriber Line) Working Group (UAWG), driving world standards for DSL Lite. This group comprised Microsoft, Compaq, Intel and a number of United States communications companies and equipment suppliers.

ADSL technology, manufactured by Westell International, was applied by BT in its Interactive TV trials in Colchester and Ipswich in East Anglia, and video-on-demand trials by BT's subsidiary Westminster Cable, in 1995.

ADSL connections from homes and small businesses enabled broadband speeds via the existing copper wire access. Once again the application of technology made use of the existing physical network but in a new way, so that users would be able to experience truly high-speed Internet connections at up to 40 times the speeds of conventional modern modems. Telephone calls could be made simultaneously.

In September 1997 BT announced that, as part of the next phase in its development of high-speed interactive networks and services, it was inviting companies in the service and content provider industries to take part in a trial in West London during 1998. The trial was based on ADSL technology, supplied to BT by a consortium led by Alcatel and Fujitsu, and built on BT's interactive television trials already mentioned, which successfully demonstrated a sustainable market for interactive services. Since those trials, there had been an increasing shift towards the Internet's importance as a delivery mechanism, and it had now become an intrinsic part of BT's plans.

DSL Lite, a lower cost development of ADSL technology, worked up to 30 times faster than most existing modems, but operated on an existing copper telephone network. It would be compatible with the standardised ADSL line cards which BT planned to install in exchanges. The DSL Lite development had the advantage that the equipment at the customer's home could be built into a PC, in the same manner as modems previously, and plugged into an ordinary telephone socket.

BT launched a six month trial in February of a revolutionary new payment service, BT Array, for Internet users who wished to make small value purchases. BT Array was aimed at Internet users who wished to buy goods, services, information or software that were priced between a few pence and a few pounds. The service provided an easy, secure and economical way of making these ‘micropayments'. Customers first registered via the Internet and forwarded their credit card details and their e-mail address on-line, a once-only process over secure facilities. Users chose their own account name and password when they registered, and were then able to purchase items from any merchant displaying the BT Array micropayment logo. BT Array then consolidated the account and charged it to the customers' VISA or Mastercard periodically. BT Array users could manage their accounts and make purchases from any World Wide Web access device. In addition, they could see their own credit balance and get a listing of their purchases on-line.

The cost of a directory enquiry rose from 25p incl. VAT to 35p on 18 February to reflect an £84 million investment in new technology over the following year to further improve the service (see 1991 and 1994 entries). International directory enquiry charges on '153' rose from 60p to 80p per enquiry at the same time.

BT launched a new 'no frills' service on 19 February to help customers who had difficulty affording standard prices to be on the phone. For a quarterly line rental of £9.25, customers of BT In-Contact could receive all incoming calls, but be restricted to the emergency and BT operator services for outgoing calls. Customers joining BT In-Contact pay a joining fee of £9.99. The quarterly rental of £9.25, payable in advance, compares with the standard residential rental of £26.62, and the minimum payable under BT's Light User Scheme of £10.24.

BT In-Contact was available only on single residential exchange lines, and not on lines connected to payphones or those used exclusively in connection with a burglar alarm or other monitoring service. It could not be used as an additional line in households with a telephone service from another source, including mobile. Outgoing calls were restricted to 999, 112, 150, 151 and 12822 (BT's Ring Me Free service. BT continued to run the Light User Scheme, which offered a rebate based on call bill size for residential customers who wanted to make a few calls.

BT confirmed its presence in the Millennium Dome and announced an imaginative e-mail initiative at the national launch with Prime Minister Tony Blair at the Royal Festival Hall on 24 February. BT announced a £12 million in the national Millennium programme.

BT planned to offer a free e-mail address service for everyone in the UK as a legacy of the nation's Millennium celebrations, and to improve technology access and communication skills. Originally known as Mill-e-Mail, the service was later marketed as talk21 and was based on the World Wide Web to give users complete mobility with a globally accessible e-mail directory and a free e-mail address. The service was ideal for those who already had an e-mail account at the office but wanted a personal account, as well as for those who shared e-mail at home through the typical package of services offered by Internet service providers. It would also appeal to mobile professionals, students, and even people without computers who could get access to the Internet in cafés, libraries, airports and, later, through television sets.

Internet use was set to become increasingly prevalent with the launch of the Department of Trade and Industry initiative 'IT 4 All' which was sponsored by BT, and would establish up to 4,000 additional venues where the public could get access to the Internet.

talk21 was to be open to anyone over the age of nine and to help people to make and maintain contact with each other, wherever they might live.

BT had studied the Millennium project for two years and was convinced there were good reasons for the company playing a significant part in the celebrations. BT would focus its Millennium activities, both in the Dome and across the nation, on helping the UK to become the world's best communicating society.

The Dutch Government awarded a mobile licence on 26 February to , the joint venture company established between BT and NS (Nederlandse Spoorwegen, the Dutch national railway company).

BT and the Directorate General of Telecommunications P&T, China (China Telecom) signed a Memorandum of Understanding (MoU) in London on 17 March with the purpose of encouraging better co-operation and understanding between the two companies. The agreement, which sought to encourage a closer mutual working relationship, was to allow the two companies to co-operate and share advice in the areas of technology and business opportunities.

A single industry-wide dialling code was introduced in March that would help customers to identify services such as information, competition and entertainment lines. BT welcomed the development, stating that moving all such services to a single 09 prefix was a positive step that would enable customers to make an informed choice based on easy recognition of both the nature and the cost of these calls. However, BT was very concerned that customers should not lose the high level of consumer protection that customers had enjoyed since 1992, from when BT offered a range of options that allowed customers to choose the types of service that could be accessed from their lines. In 1992, BT responded to customer demand by introducing a free facility for customers to restrict access to information and entertainment services from their lines.

In 1994, BT introduced a free PIN number "opt-in" facility for customers who wished to access adult services from their lines. The Department of Trade and Industry approved this proposal and 50 MPs signed an early day motion in support.

In welcoming the latest development, BT announced that it did not seek to censor the provision of adult services if there was genuine consumer demand. BT believed that the free "opt-in" facility struck the right balance between those who wished to access such services and the majority of customers who preferred access to be restricted from their lines.

BT launched two new discount schemes on 1 April which would bring significant savings to UK businesses on their regional and national calls:

BT Key Cities gave a 15 per cent discount on the cost of the calls they made to those cities which they called regularly. Key Cities cost £2.50 per quarter per site for each city nominated, or £10 per quarter for a block of five cities. Customers could nominate up to five cities from a list of 30 of the UK's most frequently called centres.

BT Key Regions gave the same discount on calls within their own region. Key Regions cost £7.50 per quarter for each site and covered regional and national calls made within the customer's own region, broadly based on the Government's new Regional Development Agency areas in England, Scotland, Wales and Northern Ireland.

Both schemes provided discounts on regional calls up to 35 miles and national calls over 35 miles. These discounts did not apply to local calls, but to regional and national calls dialled directly by customers. Customers could join both Key Cities and Key Regions but only one of the discounts applied to any call. Both provided for even more substantial savings - up to 42 per cent - when combined with BT's existing Business Choices and Key Numbers discount schemes. This meant that for a business that already had BT Business Choices Level 1 and Key Numbers schemes, national daytime calls cost just 3.9p per minute with either Key Cities or Key Regions. This was an overall saving of 42 per cent on BT's basic price of 6.8p per minute.

BT launched Schools Internet Caller on 20 April, a new service offering affordable access to the Internet for Britain's 32,000 schools.

Oftel had accepted on 6 October 1997 BT's pricing proposals which would allow schools across the country access to the Internet for £445 a year. Using ordinary telephone lines, schools would be allowed unlimited access for up to 10 hours every school day. BT would also offer low cost high-speed digital access to the Internet using ISDN lines for £790 a year. This would also give unlimited access between 8am and 6pm on school days. There would be no separate connection charge.

BT's proposals had been the result of detailed discussions between BT, the rest of the telecommunications industry, the education sector and Oftel. Both BT's offers, only available to schools, allowed the freedom to choose any Internet service provider. The 2,000 schools which already accessed the Internet on BT lines would also be able to take advantage of the new prices.

Schools Internet Caller reflected the Government's and Prime Minister Tony Blair's commitment to education, and their recognition that telecommunications technology was central to transforming the quality of teaching and learning in schools. BT Chairman Sir Iain Vallance had warmly supported this the previous month, and Schools Internet Caller was BT's response to the Government's drive to kick start the use of information technology in the UK's 32,000 primary and secondary schools. Schools Internet Caller was a significant step towards the realisation of the Government's pledge of getting all Britain's primary and secondary schools wired to a National Grid for Learning by 2002.

BT, in a consortium comprising NTT of Japan, Singapore Technologies Telemedia, and Singapore Power, was awarded a fixed and a mobile telecommunication licence by the Singapore government on 23 April. Under the terms of the licence, the company would begin services on 1 April 2000 (see entry).

BT launched a national telephone helpline service for its Hindi-speaking customers in the UK on 28 April. Hindi-speaking BT customer service advisers, based in Colindale, north London, answered calls to the helpline which operated between 8am and 8pm, Mondays to Saturdays. The Asian helpline, on 0800 401 000, advised customers about all aspects of BT's service for residential customers, including latest news about BT's best price deals for all their needs.

BT introduced its latest price cut on 29 April in its ongoing programme to bring down the cost of calls. Henceforward, the cost of local calls made on evenings and overnight, Monday to Friday, came down by 10 per cent, from 1.7p a minute to 1.5p, incl. VAT. With this latest cut, a five minute call made between 6pm and 8am during the week cost just 7.5p. PremierLine and Friends & Family discounts brought the cost down to only 5.6p.

In announcing this latest saving, BT highlighted the added value to customers because of the size of UK local call areas. BT's London local area covered about 9.5 million people and, at 1,265 square miles, was six times the size of the New York local call area. Around the UK, the average local call area covered almost a thousand square miles, the size of the area within the M25. For example, the Nottingham local call area covered 1.3 million people in an area of almost 1,100 square miles, five times the size of the New York local call area. Since December 1993, BT had cut prices by more than £2 billion. In real terms, these cuts resulted in an average reduction of 34 per cent on international calls, 45 per cent on national calls over 35 miles, 28 per cent on regional calls under 35 miles, and almost 25 per cent on local calls (see entry).

BestFriend was introduced from 1 May, giving a 20 per cent reduction on one of the customer's ten specified numbers, instead of the usual ten per cent, so long as it not an international or mobile number.

New packages of special offers for businesses on international calls to Australia, France and Germany were introduced during April and May.

Throughout April, the cost of all business calls to Australia made on weekdays between 6pm and 9pm was reduced by 20 per cent.

Also during April, businesses could talk for as long as they wish to Germany - up to eight hours - at any time on weekdays, for a maximum of £5 - or just £3.40 with BT Business Choices Level 1 and Key Numbers discounts.

BT and Marubeni Corporation formed a joint venture in Japan in May to provide domestic and global communications services. The joint venture company was called BT Communications Ltd. The new company was the result of an agreement the previous March which anticipated the merger of Network Information Service (NIS), in which BT had a 36 per cent stake and Marubeni 41 per cent, with BT Japan on 1 April to form BT Network Information Service (BT NIS). The new enlarged company was owned 51 per cent by BT, 31 per cent by Marubeni and 18 per cent by minority shareholders. BT NIS would provide companies in Japan with the full range of domestic and international products and services previously available from NIS as a Type 2 licenced carrier. (Type 2 licence holders leased infrastructure from Type 1 licenced carriers).

In the event, BT NIS became a wholly owned subsidiary of BT Communications Services (BTCS), which was the main joint venture company created in May, 70 per cent owned by BT and 30 per cent by Marubeni. On 28 July 1998, BTCS was granted a Type 1 facilities-based telecommunications licence by the Ministry of Posts and Telecommunications (MPT) in Japan. The licence allowed it to build and own its own infrastructure, an international network and fibre optic ring in Tokyo.

Following a pilot scheme in 3,000 kiosks in the Meridian TV area in May, BT announced that companies would be able to advertise their products and services inside 50,000 of its public payphone kiosks.

- BT's joint venture company in France - announced in June 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 made an agreement with Sri Lanka's national telephone operator, Sri Lanka Telecom, to distribute managed data services, Concert Communications Services, from the end of May.

A three month programme was launched in June by BT using its telemarketing expertise to assist the Government's New Deal project.

Staff at BT's Connections in Business telemarketing centre in Dundee called up to 10,000 small and medium enterprises to seek new opportunities for jobseekers. The programme was undertaken in conjunction with the Employment Service.

BT and AT&T announced on 26 July that they would create a $10 billion global venture to serve the complete communications needs of multinational companies and the international calling needs of individuals and businesses around the world. The venture would offer communications services of an unprecedented scale, scope and level of quality.

The venture would combine the trans-border assets and operations of each company, including their existing international networks, all of their international traffic, all of their international products for business customers, BT's global solutions company Concert Communications Services, and BT and AT&T's multinational accounts in selected industry sectors.

The two companies would also develop an intelligent managed Internet protocol-based global network to be implemented by the venture, its parents and their partners.

Owned equally by BT and AT&T, the venture in its first full year of operation was expected to have revenues of more than $10 billion, growing thereafter in excess of 15 per cent a year. Operating profits were expected to be around $1 billion in the venture's first full year, growing at 15 to 20 per cent a year.

Through the venture, BT and AT&T aimed to be the undisputed leaders in the fast-growing global communications services market.

The venture, which was to be named later, would be free-standing with its own chief executive officer (named in March 1999 as David Dorman, president and chief executive of PointCast, the US Internet based broadcast news company), and its own management team. Its Board of Directors would comprise executives from both parent companies. Sir Iain Vallance would be the venture's first chairman.

With its operational headquarters in the eastern US, the venture would initially employ about 5,000 people worldwide. It would have its own sales force to serve directly corporate customers in selected industry sectors around the world.

The venture would stimulate competition in recently liberalised markets by supporting new competitive operators around the world. Many of them would be distributors for the new venture and all would be potential customers for its carrier services.

The venture would manage its correspondent international network which reached 237 countries and territories, and its managed network which had 6000 nodes in 52 countries covering nearly 1000 cities worldwide.

Both companies emphasized their concern that customers of their existing alliances would be served effectively and continuously. To that end, when BT completed its purchase of MCI's interest in Concert in September 1998, AT&T was appointed a non-exclusive distributor of Concert services in the US on 11 November. From that date, AT&T sold the Concert portfolio of international voice, data and Internet Protocol (IP) services, marketed under the AT&T Concert brand. MCI would remain a non-exclusive distributor of Concert until November 2000.

Between the announcement and the closing of the agreement, the two companies would align their international operations, strategies and investments within regulatory, contractual and legal constraints.

The formation of the venture was subject to certain conditions, including receipt of regulatory approvals; the closing of the merger between MCI and WorldCom (which took place in September 1998); the purchase by BT of MCI's interest in Concert (which also took place in September); and the final negotiation and execution of definitive documents.

BT launched Touchpoint - touch screen, interactive multimedia kiosks - across the country following a six month trial the previous year. Heralded by the Design Council as one of the UK's most exciting new inventions, Touchpoint kiosks were aimed primarily at residents and English speaking tourists.

Information held on BT Touchpoint for customers to use ranged from a guide to what's on and where to go (including restaurant, cinema, theatre guides as well as a ticketing facility) to up-to-date news, sport and local news and horoscopes, as well a street guide and shopping area.

By simply touching the screen, customers were able to access any area they choose, to see and hear the content in a mixture of text, picture and video formats. Each Touchpoint kiosk comprised a high quality colour touch screen, an integrated telephone handset which allowed free direct contact with suppliers for bookings and ordering, and a printer from which vouchers, coupons, maps could be printed. By adding a telephony facility there was also the potential to offer Internet and e-mail access. The kiosks accepted credit card or coin payment for the printouts, with credit cards being validated by the system in real time.

From 1 August 1998, the quarterly exchange line rental for business customers was increased to £37.34p excluding VAT, an increase of £1.50p, or about 12p a week. The increase was in line with the current rate of inflation of 4.2 per cent. Exchange line rental had last changed on 1 July 1997.

Over the previous five years the annual bill for an average BT business customer had fallen by more than £100 - or nearly 28 per cent in real terms when inflation was taken into account.

Exchange line rental for residential customers was unchanged until 1 November when they rose from £26.62 to £26.77 a quarter, a rise of little more than 1p a week. BTHighway and In-Contact line rentals were unaffected by these changes.

This was the first residential line rental increase for 16 months and it did not change the BT commitment that overall bills would continue to fall. BT remained committed to keeping price changes for residential customers to 4.5 per cent below the rate of inflation each year until 2001. In the previous five years the average residential bill had come down by 21 per cent in real terms after taking rental into account.

In September BT began marketing its OnePhone residential service, a breakthrough in telephone technology which merged a GSM mobile handset with the domestic phone, using a single number. Scientists from BT's research laboratories at Martlesham Heath developed the necessary technology, working with the Swedish company Ericsson.

A version for business use had been successfully developed in June 1997 on BT's own sites, after which it was supplied for use in a number of large corporations. The early success of the business service enabled BT to develop a residential version more rapidly.

Whilst in the home, the BT OnePhone logged on to the fixed telephone network, acting as a high quality digital cordless phone. But once outside its 300 metre range, it switched to a GSM mobile network to become a fully functional cellular phone. Customers could have a new single number which reaches the BT OnePhone regardless of whether it was in home or mobile mode.

BT Highway, a new mass-market digital communications service which for the first time allowed UK customers to surf the Internet at high speeds and use the telephone simultaneously over their existing telephone line, was introduced on 15 September. The launch followed a trial of around 300 households in the Midlands earlier in the year.

BT Highway transformed a customer's existing telephone line into a fast, reliable and multi-functional digital Internet and multimedia connection, taking the wait out of the World Wide Web. The new service used the latest digital access technology supplied by Marconi Communications (previously known as GPT) and Ericsson, and operated over existing BT telephone lines at speeds several times faster than the fastest modem.

With BT Highway, customers could opt for either Home Highway - designed for home Internet users and occasional home workers - or Business Highway, which was aimed at small and medium-sized businesses, homeworkers and teleworkers.

There was a choice of using a combination of analogue or digital connections over a single telephone line: two digital data channels (each with a speed of 64 kilobits per second); one analogue voice channel and one digital data channel; or two analogue voice channels. Alternatively, the customer could combine the two digital data channels to give one line with a speed of 128 Kilobits per second.

With the introduction of this service, families or small businesses could surf the Internet or send e-mails and make and receive telephone calls simultaneously. Previously, users with a single analogue line had to disconnect from the Internet to use the phone.

BT Highway also meant that customers could benefit from a fast and clear digital service without having to give up their existing telephone line and equipment, BT

call discount schemes, or the range of BT Select Services. In addition, BT Highway customers had three numbers - one for each analogue line, and one covering both of the digital connections. In most cases one of the analogue lines could keep the customer's existing number.

BT Highway was easy to install, providing an additional socket with two digital ports and two analogue ports connected to a customer's existing telephone equipment. A BT engineer could carry out conversion to BT Highway quickly and easily without having to dig up the road.

Customers simply plugged in their existing telephone equipment and computers in much the same way as they did previously. To access online data services and the Internet through BT Highway, a customer required an ISDN card for their PC or a terminal adapter. For BT Home Highway, there was a conversion charge of £116.33 inc. VAT (for upgrading from a normal phone line) and a monthly rental of £40 inc. VAT, which included a monthly free call allowance of £15 inc. VAT.

BT Business Highway was available in three different options: Start Up, Low Start and Call Plan. For example, the Start Up option had a conversion charge of £99 ex-VAT and a monthly rental of £44.58 ex VAT which included a monthly call allowance of £19.16 ex VAT – presenting a monthly cost as low as £25.42 ex VAT. This worked out at just 53p per month more for Highway than for 2 analogue lines.

VIAG Interkom, BT's German joint venture, announced on 1 October the launch of its new mobile communications and Internet services becoming the first company in Germany to provide fixed, mobile and Internet services from a single supplier.

The mobile service - called citypartner - was available initially in the densely populated areas in and around Berlin, Hamburg/Luebeck, Hanover, Leipzig and Halle, Munich, Nuremberg, and the Rhine/Ruhr, and Rhine-Main/Neckar regions. Calls cost from as little as 29 pfennigs (about 10p) per minute.

The new Internet service - Planet-Interkom - was aimed at the German residential market and offered Internet access at only 10 pfennings (about 3.5p) per minute from any location at any time of day.

BT acquired in October a 33.3 per cent stake in Binariang Bhd, a major Malaysian telecommunications group, investing around £250 million. The acquisition further increased BT's growing presence in the Asia Pacific region.

Binariang consisted of four operating entities: GSM Mobile (Maxis Mobile), International Gateway (Maxis Global), Fixed Network (Maxis Fibre Network) and Satellite (MEASAT). The company was set up in 1993 and was awarded 20 year licences for all businesses.

In the three years since its launch, Binariang's mobile company, Maxis, had won a 22 per cent market share. In addition, Binariang's broadband network could be accessed by 70 per cent of Malaysian corporate customers and multinational companies.

BT unveiled a new service on 6 October designed to help Police, Fire and Ambulance authorities reduce response times to emergency incidents.

Under the previous system, call information was passed orally to the emergency authority; the BT operator passes on the caller's telephone number, but the caller was required to give details of the location.

The new information service, however, allowed details of both the calling number and the address from which a 999 call had been made to be transferred automatically to the emergency authority operator's screen. This enhancement prevented misunderstandings caused by uncertainty over the precise location, unusual spellings, panic, local accents or language difficulties, and improved call handling and vehicle dispatch times by an average of 30 seconds. Extensive trials of the enhanced information service were carried out with the West Midlands Ambulance NHS Trust.

Details of a line from which a 999 call had been made continued, as previously, to be passed to the appropriate emergency authority whether or not the number had been withheld. This enabled a swift response to a potentially life-threatening incident where the caller may have been under threat or unable to speak following a collapse, and also reduced the number of ineffective calls to 999 by ensuring that hoaxers were readily identified.

BT announced on 7 October that it was setting up a nationwide consultation on proposals to close its commercial maritime radio services in 1999. Demand from seafarers for long, medium and short-range terrestrial radio services had dropped by 80 per cent in the previous five years as satellite and cellular-based services were developed. It was proposed that existing commercial terrestrial services should close entirely, or in stages, from the end of June 1999.

Safety-related communications also provided by BT, such as MF broadcasts and Navtex, would continue, but under the stewardship of the Maritime and Coastguard Agency (MCA).

BT advised customers about alternative means of communications, such as C-Sat and Mobiq, in order to provide a smooth migration to cellular and satellite services. More than 500 fishermen around the UK already used BT C-Sat, which provided secure messaging and e-mail facilities as well as being able to receive information such as weather forecasts.

As in previous years, BT ran a money saving Christmas promotion for its 20 million residential customers.

On Christmas Day and New Year's Day they were able to make calls in the UK and speak for as long as they wished with their friends and relations, for no more than 50p per call.

The offer applied to most direct-dialled calls made from BT residential lines between midnight and midnight on both December 25 and January 1.

In addition, BT charged its cheaper evening and night time rate for most direct dialled international calls made by all customers - business and residential - on Christmas Day and New Year's Day.

BT launched a new business discount scheme, BT Dual Discount, which could give business customers additional discounts on UK calls, in December.

The scheme was designed to give extra savings to its customers based on their call spend with BT on a combination of outgoing telephone and incoming Lo-call and Freefone calls. Customers have to opt in to the scheme.

The scheme offered business customers discounts of between one and five per cent for those spending more than £125 per quarter on qualifying calls after discounts. The discounts were applied on customers' net spend - after existing discount schemes had been applied. The maximum discount of five per cent was achieved at a quarterly spend of £1m.

BT acquired a 13.79 per cent stake in Kymata Ltd., a new UK manufacturer of high-speed, high-capacity optical communications components, in December.

Under the agreement, BT would licence a number of its opto-electronic patents in exchange for the stake in Kymata, and would give the company access to BT's technical know-how at the company's laboratories in Martlesham Heath, Suffolk.

BT's technical expertise and research facilities would help Kymata to accelerate the development and production of new opto-electronic integrated components for use on Dense Wave Divisional Multiplexing (DWDM)-based networks across Europe. These technologies would enable BT to increase the capacity of its core fibre optic network almost without limit, meeting the explosive demand for high-speed data communications and Internet services.

The agreement demonstrated BT's commitment to invest in the UK and help keep the nation at the forefront of innovation and technology, building on 20 years of developing world-class optical transmission technology in the UK network. At the time this comprised three and half million kilometres of optical fibres - the highest amount of fibre per customer in Europe.

In addition, BT's support would enable Kymata to establish one of Europe's first commercial opto-electronic manufacturing facilities.

BT announced in December that it would aid the funding of Ionica, for a period of up to three months, to help prevent 60,000 Ionica customers losing telephone service, including 999 cover, during the winter months. Ionica plc went into administration on 29 October 1998, after heavy losses and an unsuccessful attempt to attract the major additional funding it needed to continue in business.

BT's funding of Ionica's operations, at a cost of some £3 million, ensured an orderly transition of customers to BT and other service providers. BT contacted each customer to offer connection to the BT network, although they were free to switch to other providers if they wished.

On 5 February a global pact to liberalise telecommunications markets came into force. Almost a year previously, within the framework of the World Trade Organisation, some 70 governments had made individual commitments to open up their countries to competition in telecommunications over the next few years. As part of this agreement most countries in continental Europe liberalised their markets from 1st January 1998. This reflected the growing realisation by governments around the world that competition in telecommunications offers choice and improved services for customers, and that telecommunications is now a global business where national boundaries are increasingly less significant.

 

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