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| Turnover |
£2,576m
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| EBITDA |
£170m
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| Operating profit
before goodwill amortisation |
£19m
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| Share of venture’s
net assets, including goodwill |
£1,430m
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Concert is a major global communications joint venture owned equally
by BT and AT&T. It combines what were the trans-border assets
and operations of BT and AT&T, including the majority of their
international networks, international traffic and international
products for business customers.
Supporting Concert, BT, AT&T and their respective families of
joint ventures is a common networking architecture planned to provide
seamless service to customers. Concert’s frame relay network
reaches every major city in the UK and USA and extends to over 200
cities in 60 countries. Its global public network reaches 237 countries
directly. Concert also has investments in 115 undersea cables totalling
more than 480,000 kilometres globally.
In addition to using BT and AT&T’s extensive networks
in the UK and USA, Concert has built a high-speed IP backbone network,
spanning 21 cities in 17 countries. This supports a wide range of
internet access, internet backbone and IP virtual private network
services. Concert’s IP network is interconnected with BT and
AT&T’s domestic IP backbone networks, which distribute
Concert services in the UK and USA.
Work is underway to converge Concert’s network, infrastructure
and managed services with those of AT&T Global Network Services,
previously IBM Global Network. When this is complete, the Concert
IP backbone network should extend to more than 60 cities worldwide
and the combined portfolio of IP, data and virtual private network
services will be offered through Concert, AT&T and BT Ignite
distribution channels, particularly for delivery in Europe, Asia
Pacific and Latin America. See “Discussions with AT&T
regarding Concert and BT Ignite”, below.
Discussions with AT&T regarding Concert
and BT Ignite
We and AT&T are discussing ways to improve the performance of
the business and strengthen the scope of the relationship between
us and AT&T in business services. These discussions include
a variety of strategic alternatives to the Concert joint venture,
including the sale to, or other business combination of our business
services operations with, AT&T’s business services unit
upon its planned separation from the remainder of AT&T. Such
a transaction could include all or a substantial portion of our
business services operations, including BT Ignite and our interest
in Concert, in exchange for some mixture of cash, equity and/or
other instruments in the combined business. These discussions may
or may not lead to any sale or other business combination and may
or may not lead to any change in the existing alliance arrangements.
As possible alternatives to such a transaction, we have also been
considering a narrowing of Concert’s business scope, as well
as its termination as a joint venture. There can be no assurances,
however, that agreement could be reached with AT&T with regard
to either of such alternatives.
The BT Board believes that the BT Ignite and Concert businesses
will generate potentially significant value for the group in the
future. The Board will keep under review whether this value is best
achieved for shareholders by a combination of these businesses with
AT&T’s business services unit, a disposal of all or part
of the businesses or their separation from BT by way of IPO or demerger
from BT. Where necessary, we will seek the approval of our shareholders.
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