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Events in telecommunication history

We take it for granted today that, by pressing a few buttons on a telephone, we can talk to family, friends or business associates - not only throughout the UK, but across the world too.

Similarly, at the flick of a switch, we've grown accustomed to seeing and hearing about world-changing events beamed or transmitted live into our living rooms by TV and radio.

This communications revolution has transformed the way we live and work and promises ever more spectacular developments in future years.

But today's technology, which helps make it possible, stems from basic work done in the last century by a few pioneering visionaries. Our own company history reflects many of these developments. Here we provide a detailed history of telecommunications dating back to 1605.

If you require further information on any aspect of BT's development or telecommunications generally, contact BT Archives.


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Francis Bacon used for cryptography the five unit code applied to telegraphy in 1874 by Jean Maurice Emile Baudot (1845-1903).


Robert Hooke described how sound could be transmitted by means of a tightly stretched wire.


Swammerdam demonstrated to the Grand Duke of Tuscany that the muscle of a frog's leg contracted in an electrical convulsion when brought into contact with silver or copper. This phenomenon was rediscovered over a century later by Luigi Galvani (1737-1798), professor of anatomy at the University of Bologna in Italy, who was unaware of his predecessor.


A letter from a correspondent with the initials C M was published in the 'Scots Magazine' on 17 February which predicted the electric telegraph and suggested a way in which such a telegraph might be worked. He proposed using an insulated wire for each letter of the alphabet and passing a charge along the wires to spell words.


George Le Sage tried a telegraph system at Geneva similar to that proposed in 1753.


Ignace Chappe, brother of Claude Chappe, first used the word 'telegraph' in April. The word is derived from the two Greek words 'tele' meaning 'far' and 'graphein' meaning 'to write'. The name was later applied to the electric telegraph.


Modern communications began when the Frenchman Claude Chappe (1765-1805) constructed his 'Tachygraphe', the first working telegraph machine, which transmitted messages between Paris and Lille. It was a visual semaphore apparatus operated by three men which relayed messages along chains of towers on hilltops five to ten miles apart, using a code of 96 semaphore signals.


The British Government adopted a semaphore with three pairs of movable arms. It took 15 minutes to transmit a message 70 miles, with the potential problem of the weather causing many delays.

Don Francisco Salva, at the Academy of Sciences at Barcelona, suggested electric communication by means of 44 wires (a pair for each of 22 letters) each charged by a Leyden jar, the combinations of which could be arranged to indicate the various letters of the alphabet. He proposed that the wires should be separately insulated and rolled into a single cable. He described experiments in which the wires were covered with pitch coated paper and tied together, the whole being bound around with paper. Salva also suggested that such cables could be laid in tubes underground or beneath the sea.


The French Minister of War ordered the apparatus of Claude Chappe to be called the 'Telegraphe'.


Alessandro Volta (1745-1827), professor of the University of Pavia in Italy, announced his invention ofthe Voltaic Pile, the first electrical battery.


Dr S T Von Soemmering (1783-1850), a surgeon, described to the Munich Academy of Sciences a telegraph apparatus in which, at the receiving end, 27 lines (each allotted to a letter or symbol) terminated in a container of acid. At the sending station a key, which brought a battery into circuit, was connected as required to each of the line wires. The passage of a current caused the acid to decompose chemically and the message was read by observing at which of the terminals the bubbles of gas appeared.


Francis Ronalds (1788-1873), later Sir Francis, demonstrated a single copper wire electrostatic telegraph cable enclosed in glass tubes encased in wooden troughs in his garden at Hammersmith. The telegraph was offered to the Admiralty who turned it down, preferring to continue with their existing semaphore system.


Hans Christian Oersted (1777-1851), Professor of Physics at Copenhagen University, discovered by chance that a magnetic compass needle moved when placed near a wire carrying an electric current. He had shown the link between electricity and magnetism, an important development in the electric telegraph.


Baron Pavel Lvovitch Schilling (c.1780-1836), a Russian diplomat in Germany, constructed a revolutionary new telegraph, consisting of a single needle system in which a code was used to indicate the characters.


William Fothergill Cooke (1806-1879) and Professor Charles Wheatstone (1802-1875) entered into a partnership in May, and on 10 June patented a five-needle telegraph for which five wires were necessary. The telegraph worked by deflecting any two of the needles at the same time to point to any one of 20 letters on the grid behind the needle. Sending and receiving messages was a slow process as each word had to be spelt out. With only 20 letters on the grid, the spelling sometimes contained inaccuracies. On 25 July, Wheatstone's and Cooke's telegraph was demonstrated to the directors of the London and Birmingham Railway between Euston and Camden Town, a distance of just under a mile.


The world's first commercial telegraph line using the Cooke and Wheatstone five-needle system was commissioned by the Great Western Railway and built between Paddington and West Drayton, a distance of 13 miles. It was working to Hanwell by the 6 April and was completed to West Drayton on 9 April. The public could pay one shilling (5p) to view the telegraph and could send their own telegrams. The undertaking marked the first commercial use of electricity. The line was later extended to Slough, but when it was proposed to carry it to Bristol, the Directors of the railway company objected and the agreement with Cooke and Wheatstone was repudiated. Eventually, it was agreed that Cooke was allowed to retain the wires in position on condition that he worked the system at his own expense and sent the railway signals free of charge.


Wheatstone invented the first type printing telegraph. He also proposed a time division multiplex telegraph system.


Facsimile transmission (Fax) was first pioneered by Alexander Bain (1810-1877) and patented. His invention was a system of chemical telegraphy by which handwriting and simple line drawings could be reproduced in facsimile through the chemical action of an electric current on an impregnated tape.


A message was sent by Samuel Finley Breeze Morse (1791-1872) on 24 May over the first telegraph line in the USA from Washington to Baltimore, a distance of about 40 miles. The line was built with the help of Congress, which gave a grant of $40,000 to Morse and his associates to put it into operation. The first message sent was "What hath God wrought". Morse used equipment of his own invention which was totally different from that of Cooke and Wheatstone. He also used what became known as the Morse Code. The line was not fully operational until 1 January 1845.


The first public telegraph line was opened in February and ran between London and Gosport. The first communication transmitted was Queen Victoria's speech at the opening of Parliament.


Sir William Fothergill Cooke and Joseph Lewis Ricardo founded the Electric Telegraph Company. It merged with the International Telegraph Company in 1855 to become the Electric and International Telegraph Company, but was subsequently taken over by the Post Office.


Gutta-percha, an inelastic latex, was discovered. It was a reliable insulator in water for submarine cables and, along with rubber, was the preferred insulator for almost a century until the adoption of polyethylene from 1933.


The world's first central telegraph station was opened by the Electric Telegraph Company in Founders' Court, Lothbury in the City of London.


The British Electric Telegraph Company was formed, a rival to the monopoly of the Electric Telegraph Company.

The first submarine telegraph cable was laid across the Channel between Dover and Cape Gris Nez. This was also the first telegraph cable laid in the open sea and was laid by HM Tug Goliath accompanied by HM Packet Widgeon. It failed after only a few messages, but a successful cable was laid the following year.


An Englishman, Thomas Russell Crampton devised the first armoured submarine cable which was laid across the channel between Dover and Calais by an empty hulk, the Blazer, towed by two tugs. It was opened for use on 13 November.

The United Kingdom Electric Telegraph Company was established by an Act of Parliament, but did not become operational until July 1860.  It was subsequently taken over by the Post Office (see 1870)


The English and Irish Magnetic Telegraph Company was granted a Royal Charter in April to provide links between England and Ireland by submarine telegraph.


The Chartered Submarine Telegraph Company opened a telegraph service between London and Brussels on 20 June using a submarine cable.

The International Telegraph Company was granted a Royal Charter to lay a submarine cable from England to Holland.  In 1855 it merged with the Electric Telegraph Company to form the Electric and International Telegraph Company.

The British Telegraph Company was formed through the merger of the European and American Electric Printing Telegraph Company and the British Electric Telegraph Company.


The Electric Telegraph Company and the International Telegraph Company merged to form the Electric and International Telegraph Company in July.


The British and Irish Magnetic Telegraph Company was formed by the amalgamation of the English and Irish Magnetic Telegraph Company (formed in 1852) and the British Telegraph Company (formed in 1853). This new company was subsequently taken over by the Post Office (see 1870)


The first trans-Atlantic telegraph cable was laid between Valentia Island, Co Kerry, Ireland and Trinity Bay, Newfoundland. The cable was laid by HMS Agamemnon and the USNS Niagara. The first messages were sent on 5 August, but the cable failed after only one month. The first successful transatlantic cable came into operation in 1866.

Charles Wheatstone patented the automatic telegraph system, the forerunner of later systems using punched tape. The message to be sent was first transposed into the form of perforations in a paper tape, and then transmitted and received at high-speed.

The Lowestoft-Zandvoort cable was laid providing telegraphic communication with the Netherlands.


The London District Telegraph Company was formed to develop telegraphic communication within a four mile radius of Charing Cross.  It became the London and Provincial Telegraph Company for a short time in 1867.  It was later taken over by the Post Office (see 1870).


The Central Telegraph Office moved from Founders Court, Lothbury to Little Bell Alley, Moorgate (afterwards renamed Telegraph Street).

A telegraph service was opened with Germany when Sir Charles Bright laid an Anglo-German cable on behalf of the Magnetic and Submarine Telegraph Company.


Phillip Reis (1834-1874), a German electrician, exhibited a form of telephone in October to the Scientific Society of Frankfurt-on-Main. His telephone transmitted by electrical means musical and other sounds. The transmitter comprised a point of loose contact in an electrical circuit, arranged so that the resistance of the circuit was varied according to the intimacy of the contact between the two points, one of which was mounted on a membrane or diaphragm upon which transmitted sound waves impinged. 

The Universal Private Telegraph Company was established by an Act of Parliament in June, but did not become fully operational until 1863.  It undertook to construct and maintain lines of private wire between places of business or between residences and businesses.  It was subsequently taken over by the Post Office (see 1870),


The Telegraph Act of this year gave the Postmaster-General certain wayleave rights over public roads and streets.


The International Telegraph Union was formed by 20 participating countries, although Great Britain was not originally included. The Union was later to become today's International Telecommunications Union.


The first successful trans-Atlantic telegraph cable, 1,852 miles in length, was laid between Valentia Island, Ireland and Newfoundland by the SS Great Eastern between 13 July and 8 September. A defective cable which had been laid the previous year, also by the Great Eastern, was located and repaired, thus providing two routes for telecommunications between Great Britain and North America.


The Telegraph Act of this year gave Her Majesty's Postmaster-General the right to acquire and operate the inland telegraph systems in the UK, installed and operated by independent telegraph and railway companies.


The Telegraph Act of this year, passed before the 1868 Act could take effect, conferred on the Postmaster-General a monopoly in telegraphic communication in the UK. Under this Act, the use of all private wires except those 'maintained for the private use of a corporation, company or person' became the monopoly of the Postmaster-General, and companies wishing to conduct telegraph business within the monopoly were henceforth obliged to seek a licence from the Postmaster-General. Overseas telegraphs did not fall within the monopoly.


The previously privately owned inland telegraph system was transferred to the State on 28 January under the Telegraph Act, 1868. Capital stock to the value of £10,948,173 was created to compensate the Electric and International, the British and Irish Magnetic, the United Kingdom Electric and other telegraph companies. The Post Office took over a service with 1,058 telegraph offices and 1,874 offices at railway stations. About 60,000 miles of wire was in use. Income was c. £550,000 per annum and the number of telegrams transmitted in 1869 was 6,830,812.

Interestingly, state involvement had been foreseen from the outset of the telegraph service. The Act that incorporated the Electric Telegraph Company empowered the Home Secretary to take possession of the Company's telegraphs for one week in times of civil unrest, or longer if necessary. These powers were exercised in April 1848, when the Government was able to obstruct Chartist lines of communication using the resources of the Electric Telegraph Company.

Following the nationalisation of the telegraph service in 1870, the Post Office went on to rapidly expand the UK telegraph network, particularly in more rural areas which had previously not been commercially attractive to the telegraph companies.

Two telegraph cables to Holland and one to Germany were acquired by the Post Office and leased to the Submarine Telegraph Company.

The Post Office Factories Division (later BT Consumer Electronics Ltd. and Fulcrum Communications Ltd.) was born with the acquisition of two small factories in Camden Town and Bolton previously belonging to the Electric and International Telegraph Company and the Magnetic Telegraph Company respectively. At the time of the transfer to the Post Office these factories employed 175 people on the manufacture and repair of telegraph equipment.

The Post Office acquired its first cableship from the International Telegraph Company, a 512 ton paddle-steamer called the Monarch which was originally built in 1830. She was the first of the five GPO cableships to bear the name, but sadly Monarch (No 1) soon broke down and was sold to the Admiralty by whom she was sunk in 1910 as a target for torpedo practice.

A continental telegraph station was set up in Little Bell Alley, Moorgate (Telegraph Street).


Great Britain was admitted to membership of the International Telegraph Union.


A telegraph service between Britain and Australia was opened on 21 October. The first message, from London to Melbourne, was received early the next day. Each message had to be manually received, registered and transmitted at each of eighteen intermediate stations between London and Darwin. The average time to transmit a message was 20 hours.


The Central Telegraph Office (CTO) was transferred from Telegraph Street to the General Post Office (West) on 4 February, a building which was begun in 1869 on the site of the present BT Centre in Newgate Street/St Martin's Le Grand. GPO West, as it was known, was constructed of granite and portland stone and was originally four storeys high. Originally intended as a headquarters building, the CTO gradually occupied practically the whole building by the early 1890s; the increasing popularity of telegraphic communication was reflected in the growth of the number of staff and quantity of equipment required to meet this demand. A fifth floor was added to the building in 1884.

The CTO's role in the history of telecommunications is a significant one. The first London-Paris telephone service was controlled from here from 1891 and Marconi demonstrated his new system of wireless telegraphy on the roof of the building in 1896. In its heyday the CTO had direct communication with every large town in the UK and was the largest telegraph office in the world. At the peak of the telegraph service in 1945-46 it dealt with 64.9 million telegrams, compared to only 45,000 in 1880.

During wartime such an important communications centre was an obvious target, and the CTO suffered during both world wars. The damage in 1917 during the First World War was relatively minor, but the Second World War saw much more substantial damage; during a raid on 29 December 1940 the CTO was set alight by burning debris from adjacent buildings and the interior was totally destroyed. The shell of the building was refurbished to the first and second floors, and the unsafe upper floors dismantled. The building was reopened in June 1943, although by this time much of the telegraph work had been transferred to the outskirts of London.

Following the war, telegraphic traffic declined as more and more people turned to the telephone, and the CTO never regained its pre-war importance. It was gradually run down from 1959 as work was transferred to other locations and eventually closed in October 1962. It was subsequently declared unsafe and demolished in 1967. The site remained derelict for some years, presenting an ideal opportunity for excavations by the Department of Urban Archaeology of the Museum of London during 1975-1979, yielding much information on the earlier history of the site. Finally, planning permission was granted in 1979 for the construction of a new building: BT Centre, the present headquarters of BT, opened in 1984.

Jean Maurice Emile Baudot (1845-1903) invented the Baudot printing telegraph system using the multiplex principle suggested by Wheatstone. This was the first system to use a code consisting of five units of equal length.


Alexander Graham Bell (1847-1922) of Salem, Massachusetts constructed his first experimental telephone in Boston. Thomas A Watson (1854-1934) assisted Bell in his experiments.

Bell was a Scot by birth, and had been born at 16 South Charlotte Street, Edinburgh, on 3 March 1847. The Bell family emigrated to Brantford, Ontario, Canada, in 1870 following the deaths of Graham's two brothers from tuberculosis. From here Bell moved to Boston in the United States in 1872 to take up an appointment as a teacher of the deaf. He had inherited an interest in the training of deaf children from his father, Alexander Melville Bell, who had been a teacher of elocution at Edinburgh. Graham Bell's vocation led him to investigate the artificial reproduction of vowel sounds, resulting in a study of electricity and magnetism, and ultimately the development of the telephone.


On 14 February an application was filed in America for a patent for Bell's apparatus for transmitting vocal sounds. Within hours, Elisha Gray of Chicago (1835-1901), a superintendent of the Western Union Telegraph Company, filed a similar application. Bell was granted his patent on 7 March, before Gray. On 10 March Bell reputedly spoke to his assistant Thomas Watson the first recognisable words ever transmitted by telephone, "Mr Watson, come here, I want you". This first articulate sentence was transmitted over 100 feet of wire.

Sir William Thompson (later Lord Kelvin) exhibited Bell's telephone to the British Association for the Advancement of Science at Glasgow in September. He described it as "the greatest by far of all the marvels of the electric telegraph".


In July, Mr W H Preece (1834-1913), who later became Sir William Preece, FRS and Engineer-in-Chief of the Post Office, brought to this country the first pair of practical telephones seen in Great Britain. Later in the same year Bell's perfected type of telephone was exhibited at a meeting of the British Association in Plymouth.

Also in July, Bell and his financial backers - Thomas Sanders and Gardiner G Hubbard - formed the Bell Telephone Company in the United States. The early demand for the telephone had not been great and prior to forming their company Bell and his partners had struggled in their attempts to promote the new invention. At one point they even offered to sell the Bell patents to the Western Union Telegraph Company - Elisha Gray's employers - for $100,000. At this time the telephone was not seen as a serious rival to the well-established telegraph and the offer was refused. However, following the formation of the Bell Telephone Company, Western Union realised that their telegraph machines were being replaced by Bell's telephones and promptly formed the American Speaking Telephone Company to compete with Bell. The new company employed Thomas A Edison, Elisha Gray and Amos F Dolbear, three leading electrical inventors.


Bell demonstrated the telephone to Queen Victoria on 14 January at Osborne House on the Isle of Wight with calls to London, Cowes and Southampton. These were the first long-distance calls in the UK.

The Telephone Company Ltd (Bell's Patents) was formed to market Bell's patent telephones in Great Britain. The company was registered on 14 June with a capital of £100,000. Its premises were at 36 Coleman Street. One of the first telephone lines to be erected in the vicinity of London was from Hay's Wharf, south of the Thames, to Hay's Wharf Office on the north bank.

Thomas Alva Edison (1847-1931) of Milan, Ohio, patented in America a carbon telephone transmitter invented the previous year - a great improvement on Bell's telephone transmitter which worked by means of magnetic current.

The first trial of long-distance telephony in Great Britain as a commercial proposition was held on 1 November with a call between Cannon Street in London, and Norwich - a distance of 115 miles - using an Edison transmitter on a telegraph wire.

Professor David Edward Hughes (1831-1900) invented the microphone.

Francis Blake, an officer in the US Coast Survey from 1866 to 1878, developed a transmitter based on the experiments of Professor Hughes. Blake offered his transmitter to Bell who accepted it as a practical and reliable rival to Edison's transmitter which was superior to Bell's own. The Bell Companies throughout the world, including in Great Britain, went on to use the Blake transmitter in their telephones for 20 years. It was ultimately replaced by a transmitter originally patented in September 1878 by Rev Henry Hunnings of Bolton Percy, Yorkshire, which used particles of carbon in loosely compacted form between two electrodes. The Hunnings transmitter was later developed by others to replace Blake's as the standard instrument of the Bell Companies.

In the United States, a legal wrangle erupted in September when the Bell Company sued Western Union to protect Bell's patents. Western Union contended that it was Gray, not Bell, who had invented the telephone. However, because Bell had filed his patents before Gray, albeit only by hours, settlement was eventually made on 10 November 1879 in favour of Bell, and gave the Bell Company all Edison's telephone rights. Following this court judgement, Western Union withdrew from the telephone business and Bell's company absorbed the American Speaking Telephone Company, reforming as the American Bell Telephone Company - Boston on 17 April 1880.

The Post Office provided its first telephones, obtained from Bell's UK agent, on rental terms to a firm in Manchester.


The Telephone Company Ltd (Bell's Patents) opened Britain's first public telephone exchange at 36 Coleman Street, London, in August. It served eight subscribers with a two-panel 'Williams' switchboard. By the end of the year a further two exchanges had been opened at 101 Leadenhall Street, EC2 and 3 Palace Chambers, Westminster, the number of subscribers totalling 200.

Telephone exchanges were also opened by the company later in the year in Glasgow, Manchester, Liverpool, Sheffield, Edinburgh, Birmingham and Bristol.

Edison produced a telephone receiver known as the 'chalk receiver', 'motograph receiver' or 'electromotograph'.

The Edison Telephone Company of London Ltd was registered on 2 August with a capital of £200,000 to work the Edison telephone patents. The company's first exchange officially opened on 6 September at 11 Queen Victoria Street, London, with ten subscribers who used carbon transmitters and chalk receivers. By the end of the following February, when the company had another two exchanges in operation, it served 172 subscribers.

Daniel Connolly, T A Connolly and T J McTighe exhibited an eight-line automatic telephone exchange at the Paris Exhibition, although their system achieved little success.

Professor D E Hughes transmitted what he called 'aerial electric waves' from his rooms 500 yards down Great Portland Street, just behind what is now Broadcasting House. He was thus the first person to achieve radio communication. Later in the same year, Oliver Joseph Lodge (1851-1940), another Englishman, also transmitted wireless signals - this time a distance of 150 yards.


Although the earlier Telegraph Acts contained no reference to telephones, a court judgement was issued on 20 December in favour of the Post Office in a landmark legal action (Attorney General vs. Edison Telephone Company of London Ltd. - Law Report 6 Q B D244). The judgement laid down that a telephone was a telegraph, and that a telephone conversation was a telegram, within the meaning of Section 4 of the Telegraph Act, 1869.

Independent telephone companies were thereupon obliged to obtain 31-year licences to operate from the Postmaster-General, the Post Office taking 10 per cent of gross income and having the option to purchase a telephone undertaking at the end of ten, 17 or 24 years. It was Post Office policy to issue licences for the few existing telephone systems, restricting these systems to areas in which they were operating, and to undertake the general development of the telephone itself.

As a result of this court judgement the Postmaster-General was to continue providing the telephone service under the provisions of the various telegraph acts until the Telephone Act 1951. This Act was the first statutory recognition of the telephone separate from the telegraph, 75 years after the telephone was invented.

The Telephone Company Ltd (Bell's Patents) issued the first known telephone directory on 15 January. It contained details of over 250 subscribers connected to three London exchanges. Details of 16 provincial exchanges were also given. By the time of the publication of their next directory in April, the company had seven London exchanges, 16 provincial exchanges and more than 350 subscribers.

The Edison Telephone Company of London published its first directory (list of subscribers) on 23 March.

After some litigation over patents, the Telephone Company Ltd and the Edison Telephone Company of London Ltd were amalgamated on 13 May to form the United Telephone Company with a capital of £500,000. The new company, now controlling Bell's and Edison's patents, reflected the situation in the United States.

The first trunk telephone line was opened between Leeds and Bradford on 29 January.


Following the court judgement of the previous year the Post Office proceeded to convert some of its telegraph service exchanges for use as telephone exchanges. The first was Swansea, opened on 23 March, followed by Newcastle-upon-Tyne, Bradford and Middlesbrough. ABC telegraph instruments were replaced by telephones.


Other sources contradict this date and indicate that Swansea telephone exchange was not opened until 22 October 1883 and that the first Post Office exchanges were in fact in Newport and Cardiff in South Wales, both opened on 31 August 1881.

The Provincial Telephone Company was floated in February with a capital of £75,000 to promote telephone companies.

The National Telephone Company was formed in March to exploit the market in Scotland, the Midlands and Ireland. Other companies were the Lancashire and Cheshire Telephonic Exchange Companies (capital £250,000) in May and the Northern District Telephone Company (capital £100,000) in December.


On 17 July the Postmaster-General, Henry Fawcett, decided to grant licences to operate telephone systems to all responsible persons who applied for them, even where a Post Office system was established - reversing the previous policy 'on the ground that it would not be in the interest of the public to create a monopoly in relation to the supply of telephonic communication'.

G L Anders of London patented a central battery system by which telephones could be supplied with electrical power from the exchange, thereby making batteries at the telephone unnecessary.

W H Preece, Post Office Engineer-in-Chief and Electrician (1892-1899) experimented in wireless telegraphy between Southampton and Newport, Isle of Wight.


The second of the 'Monarch' cableships was built for the Post Office, remaining in service until being sunk off Folkestone during the First World War on 8 September 1915. Monarch (No. 2) was the first cableship designed specifically for the Post Office and weighed 1,348 tons.

The Central Telephone Exchange was established at Oxford Court, London.

David Sinclair, an engineer for the National Telephone Company's Glasgow District, patented the first automatic telephone switching device in this country on 7 July. It enabled a subscriber on a branch exchange to be connected to any other on the system by an operator situated at a central exchange, without manual attention at the branch exchange. . Sinclair established a working six line automatic exchange at Coatbridge near Glasgow.


On 19 February L M Ericsson of Sweden combined the transmitter and receiver to produce the earliest telephone handset.

The United Telephone Company absorbed the London and Globe Telephone Company on 24 June.

On 7 August the Postmaster-General announced his decision to withdraw the restriction of exchange areas to five miles. Instead, telephone companies were to receive licences to work anywhere in the United Kingdom, and were thus enabled to create exchange areas of any extent and to connect them by trunk wires. The way was now clear for the development of a national system of trunk wires.

This 'liberalisation' by the Postmaster-General also brought about the birth of the public call office. Telephone companies were now allowed to establish telephone stations which any member of the public could use. There were little more than 13,000 telephones in use at this time and the Postmaster-General's decision allowed access to the telephone to a whole new sector of society to whom the new technology was largely only a rumour. The new 'call offices' were soon advertised in the national and local press. They were at first located in 'silence cabinets' found in shops, railway stations and other public places.

London's first trunk telephone line was opened with Brighton on 17 December.

The first upright multiple telephone switchboard in England was installed by Western Electric in Liverpool.

The Western Counties and South Wales Telephone Company was floated in December with a capital of £400,000.

The South of England Telephone Company was floated with a capital of £400,000. Seven companies now covered the whole of Great Britain.


Long-distance telephone trials took place between London and Liverpool. Telegraph circuits were employed and the speakers stationed in Uxbridge and Liverpool.

Through-night service was given for the first time at the Heddon Street and Westminster exchanges of the United Telephone Company, mainly to serve Parliament and its members.


One of the first freestanding call offices (later to be known as 'kiosks') was introduced in Bristol by the United Telephone Company. It was basically a small wooden hut where a three-minute call could be made for just 'tuppence' (a little under 1p). Not all early payphones had a coinbox built into them; some of the kiosks had a penny-in-the-slot mechanism on the door, while others had an attendant to collect the fee. The National Telephone Company actually produced subscribers' Trunk Pass Keys which were used to unlock call offices when members of the public wished to make a trunk call in the attendant's absence.


An Englishman, Oliver Heaviside (1850-1925), propounded the theory that the effect of the large electrostatic capacitance of cables could be minimised by increasing their inductance. This increased the distance telephone signals could travel without fading and led to the successful development of long-distance telephone cables.


Heinrich Rudolf Hertz of Germany (1857-1894) successfully transmitted electro-magnetic waves (radio waves), proving that they could be reflected and refracted, thus confirming the mathematical theory of James Clerk Maxwell (1831-1879).


Almon B Strowger (1839-1902), a funeral parlour proprietor of Kansas City, filed a US patent for an automatic telephone system on 12 March, and his patent was issued in May 1891. He had discovered (so the story goes) that his local telephone operator was married to another undertaker to whom she diverted Strowger's calls. Strowger's experiments involved the use of brass collar studs and matches, but the Strowger switching system proved extremely popular and in 1922 was adopted as the standard for all automatic telephone exchanges in the UK. This electro-mechanical technology persisted for over seventy years from 1922. The network of over 6,700 telephone exchanges, which BT inherited on its privatisation in 1984, included many using Strowger based technology. These were gradually replaced by digital or modern electronic exchanges during a £20 billion investment in the UK's phone network by BT, culminating in the closure of the last working Strowger electro-mechanical exchange at Crawford, Scotland on 23 June, 1995.

The United, the National, and the Lancashire and Cheshire Telephone Companies amalgamated on 1 May to form the National Telephone Company with a capital of £4,000,000 and providing 23,585 lines. The new company proceeded to buy up smaller concerns, Northern District Company (1,551 lines) in April 1890, South of England Telephone Company (3,255 lines) in October 1890, Western Counties and South Wales Company (4,027 lines) in January 1892.

The Post Office acquired the Submarine Telegraph Company's Anglo- Continental circuits at a cost of £67,163. The Post Office also acquired the company's 760 ton paddlesteamer, The Lady Carmichael, named after the wife of the company's chairman. The cableship was renamed the Alert in 1894 and remained in service until being scrapped in 1915.


Bell's Patent for the membrane telephone receiver expired on 9 December.

A trunk circuit linking London to Birmingham was brought into service by the National Telephone Company on 10 July. For the first time telephone communication was opened between London and the Midland and Northern Counties.


The first submarine telephone cable was laid by HMTS Monarch (No. 1) between England and France enabling telephone conversations to be made between London and Paris.

The London-Paris telephone service, inaugurated in April of this year, was controlled and worked from the Central Telegraph Office until transferred to the Central telephone exchange in GPO South, Carter Lane in February 1904.

Dry core paper insulated telephone cable was introduced. The first installation of this cable was between Pipewellgate and Deckham in Gateshead-on-Tyne.

The continental telegraph 'Cable Room' was transferred to the Central Telegraph Office.

Edison's Patent for his telephone transmitter expired on 30 July. With both master patents expired, effective competition between the Post Office and the National Telephone Company now became possible.


On 22 March in the House of Commons the Postmaster-General, Sir James Fergusson, opposed Bills presented by the National Telephone Company and the New Telephone Company which sought extensive new powers. He then announced the Government's proposal to purchase the trunk lines of the National Telephone Company, the operations of which would henceforth be confined to local areas under new licences. The shift in policy was a consequence of complaints over the quality of the National Telephone Company's service and the accumulation of its overhead wires in towns. Of even more immediate concern to the Post Office was the increasing competition of the telephone which was now markedly affecting revenue from the telegraph services. The new policy was outlined in a Treasury Minute of 23 May which led to the Telegraph Act, 1892 - passed on 28 June - which made provision for the raising of £1,000,000 for the purchase and extension of the trunk telephone system.

The world's first public automatic telephone exchange, using Strowger's automatic telephone system, was installed at La Porte, Indiana in November; 45 subscribers were connected.


A Hughes duplex telegraph was installed between London and Paris and Rotterdam.


The Post Office trunk telephone system was opened to the public on 16 July.

Trunk lines linked London to Glasgow, Belfast and Dublin for the first time.


A detailed agreement between the Postmaster-General and the National Telephone Company regarding the sale of the latter's trunk telephone lines was signed on 25 March. On 4 April, 29,000 miles of cable in 33 trunk lines were transferred to the Post Office at a cost to the State of £459,114.3s.7d. The transfer was completed by 6 February 1897. Under the terms of the agreement, intercommunication was established between exchange subscribers of the Post Office in one area and those of the National Telephone Company in another area. There was no such facility, however, for subscribers to the two systems in the same area, the company claiming that any other telephone concern with very few subscribers should not benefit from the company's system in the same area.

The Automatic Electric Company in America developed a rotary dial, the forerunner of the later dial which was common until recently.

Guglielmo Marconi (1874-1937) called upon the Engineer-in-Chief of the Post Office in June to demonstrate his new system of 'telegraphy without wires' following a lack of interest from the Italian Government. Marconi with his mother had settled in London from his native Italy the previous year. Marconi gave the first demonstration of his new system of wireless telegraphy before members of the Post Office administration on 27 July of this year. With the transmitter on the roof of the CTO and the receiver on the roof of GPO South in Carter Lane 300 yards away, signals from the transmitter were satisfactorily recorded. This event is recorded by a plaque on the outside of the current BT Centre near the main entrance.

In August, the Post Office permitted Marconi to experiment with wireless apparatus on Salisbury plain and other places, and gave financial backing.


The Marconi Wireless Telegraph and Signal Company was formed in July. Marconi was also granted a British patent for an invention by which 'electrical actions or manifestations are transmitted through the air, earth or water by means of electric oscillations of high frequency'.

An automatic telephone system was introduced into Great Britain by Strowger and exhibited at Winchester House, Old Broad Street, London.

A telephone licence for 14 years was granted to the States of Guernsey on 31 December, the first time a telephone system was to be available in Guernsey. The ties between the States of Guernsey continued until responsibility for telecommunications services was transferred to local control in 1973.

Marconi established the first permanent wireless station at the Needles Hotel, Isle of Wight. Earlier in the year he made the first ship-to-shore communications, while on a visit to Italy, over a distance of 12 miles. The Italian navy was consequently the first in the world to use radio communication.


The first Guernsey telephone exchange was opened at St Peter Port on 28 June.

The first Jersey telephone exchange was opened by the National Telephone Company at Minden Place, St Helier. The Post Office assumed control of the telephone service in 1911, and local control was taken up when responsibility was transferred to the State of Jersey in 1973.


A Telegraph Act was passed in this year to enable local municipalities outside London to set up their own local telephone systems. For some years there had been increasing agitation from local authorities as a result of the inefficiency and excessive cost of the National Telephone Company's local exchange services. The Municipal Corporations Association, representing most of the English boroughs, was in favour of State control of the company's system, whereas the Scottish municipalities led by the Glasgow Corporation (who had unsuccessfully applied for a telephone licence as early as 1893) supported municipal competition with the NTC. The Telegraph Act, 1899 embodied the Government's decision (following the investigations of a House of Commons Select Committee and other official enquiries) to set up a large telephone system in London, and to leave competition with the NTC in provincial towns to local authorities to whom licences would be issued. In rural districts not previously served by the NTC, the Post Office, which mostly had telegraph routes which could carry telephone circuits, opened small exchanges. Later in the year the Post Office began laying an extensive system of telephone lines in London.

The policy of municipal telephony in provincial towns would have seemed a natural development in adding to the already wide powers of local authorities in providing gas, water, electricity, transport and other public amenities. In the event, it was to prove a failure. Of 1,334 urban local authorities that might have sought licences under the Telegraph Act, 1899, only 55 applied for information. Of these, only 13 asked for licences, all of which were granted: Glasgow, Belfast, Grantham, Huddersfield, Tunbridge Wells, Brighton, Chard, Portsmouth, Hull, Oldham, Swansea, Scarborough and West Hartlepool. And only six actually opened telephone systems: Glasgow (1901), Tunbridge Wells (1901), Swansea (1902), Portsmouth (1902), Brighton (1903) and Hull (1904). Only the service provided by Hull continues to the present day. The remaining five services were all sold to the National Telephone Company or to the Post Office by the end of 1913.

Marconi bridged the English Channel by radio for the first time when South Foreland, Kent, established communication with Boulogne-sur-Mer by wireless telegraphy.

The first maritime distress radio call was made when the East Goodwin Lightship brought the Ramsgate lifeboat to the assistance of the stranded German ship Elbe.


The Post Office trunk telephone system was opened to the public on 16 July.

Trunk lines linked London to Glasgow, Belfast and Dublin for the first time.


The first municipal telephone exchange was inaugurated in Glasgow on 28 March. A municipal telephone system was also opened in Tunbridge Wells in June.

The Postmaster-General and the National Telephone Company signed an agreement on 18 November to prevent unnecessary duplication of plant and wasteful competition in London. There was now free intercommunication between the two systems in London for the first time.

The agreement also provided for the purchase of the NTC's system on the expiry of its licence on 31 December 1911.

On 12 December the first wireless signals were transmitted across the Atlantic from Poldhu Wireless Station to Signal Hill, Newfoundland, where Marconi heard the agreed signal which was a succession of three dots, the letter 'S' in Morse Code.

Induction coils were added experimentally every few miles to the London-Birmingham cable laid in 1897-1898 to increase the distance that telephone signals could travel without fading, thereby applying the theory of Oliver Heaviside of 1887.

The firm of Creed & Company of Croydon, founded by F G Creed (1871-1957), developed a receiving reperforator which enabled telegraph signals to be received and recorded in the form of perforations in a paper tape at speeds of up to 200 words a minute. It saved manual work at the receiving station and made re-transmission of messages easier.


The first Post Office exchange in London was opened on 1 March 'Central Exchange' with a capacity for 14,000 subscribers. 'City' Exchange was the second (capacity 18,000) followed by 'Mayfair' to serve the West End, 'Western' for Kensington and 'Victoria' for Westminster in the same year. Several other Post Office exchanges were also opened in the London suburbs.

The British Pacific Cable between Canada and Australia and New Zealand was completed on 31 October. It opened for traffic on 8 December.

A licence to operate a local telephone service was granted to Hull Corporation for the first time on 8 August.

The Tunbridge Wells municipal telephone service was sold to the National Telephone Company on 22 November.


A cheap rate telephone service was introduced by the Post Office; six minutes were allowed for the normal price of a three-minute call between 8 pm and 6 am.

A telephone service was opened with Belgium.


John Ambrose Fleming (1849-1945) invented the 'Thermionic Valve', a device with two electrodes which enabled an electric current to pass through in one direction, but prevented the currents from flowing the other way. In addition to its use as a radio wave detector, it was also used as a power supply rectifier, converting alternating current into steady direct current. Fleming's valve can be regarded as one of the first true electronic components.

The first municipal telephone exchange in Hull was opened on 28 November.

The trunk telephone service was transferred from the cable room in the General Post Office, London, to the Central Telephone Exchange, GPO South, Carter Lane. 144 trunk circuits and 274 junction circuits were transferred.

The Wireless Telegraphy Act was passed which conferred licensing powers on the Postmaster-General.


An agreement between the Postmaster-General and the National Telephone Company fixing the conditions for the transfer of the company's undertaking in 1912, was signed on 2 February and came into force on 1 September, having been ratified by the House of Commons on 9 August. From this time the Post Office and the National Telephone Company began to work towards the ultimate unification of their two systems. Intercommunication was possible between subscribers to both systems in the same local area throughout most of the country. The NTC installed call offices on Post Office premises and duplication of plant was avoided. Post Office underground cables henceforth largely met the development needs of the NTC's system on rental terms. These and other measures were to ease the changeover in 1912.

Marconi patented the horizontal direction aerial.


A device known as the 'Keith Line Switch' was designed and seen as an important advance in machine-switching design. The use of this switch (described in British Patent Specification No. 26301, 20 November 1906) enabled a trunk line to be selected in advance of a call by means of a stepping master switch. This maintained all the disengaged line switches in readiness to connect with a disengaged trunk line.

The Post Office's first coin-operated call box was installed by the Western Electric Company at Ludgate Circus, London.

The Brighton and Glasgow Corporations' telephone services were sold to the Post Office: Brighton on 10 September for £49,000 and Glasgow on 22 October for £305,000.

The International Radiotelegraph Convention (later known as the International Radiotelegraph Union) was formed by 29 countries.

Trunk telephone charges were reduced to half-price for conversations between 7 pm and 7 am.


Lee de Forest (1873-1961) added a third element to Fleming's thermionic valve (the diode) to create a triode. This had the ability to amplify faint signals, making possible long distance radio and even television communications. The triode was a remarkable invention and was only matched in importance by the invention of the transistor which replaced it some 40 years later.

The Swansea Corporation Telephone Service was sold to the National Telephone Company on 31 March 1907.

Charles L Krumm and his son, H Krumm, introduced the first stop- start type of telegraph. This instrument, known as the 'Teletype', used a typewriter keyboard for direct sending and a five unit code with stop-start signals, as used by later teleprinters.


The Post Office opened its first ship-to-shore wireless radio coast station at Bolt Head, Devon and licensed stations at Cullercoats, Heysham Harbour, Parkeston Quay and Clifden (the latter for transAtlantic wireless telegraphy by the Marconi Company).


The Post Office acquired the Marconi coastal wireless stations at Caister (Norfolk), North Foreland (Kent), Niton (Isle of Wight), Lizard (Cornwall), Seaforth (Liverpool), Rosslare (Wexford), Crookhaven (Kerry) and Malin Head (Donegal). The Marconi Company retained its licence for its long distance stations at Poldhu and Clifden.


The murderer Dr Crippen and his mistress Ethel le Neve were arrested in July while sailing across the Atlantic as a result of a wireless message from SS Montrose to New Scotland Yard, the first time wireless was applied in this manner.

A trunk telephone cable was opened between Manchester and Liverpool.

The National Telephone Company was licensed on 10 August to provide fire, police and ambulance telephone circuits.


The Automatic Telephone Manufacturing Company Ltd of Milton Road, Edge Lane, Liverpool, was formed in November to exploit the UK Strowger patent rights of the Automatic Electric Company of Chicago, the proprietors of the patents. ATM was the first manufacturer of automatic telephone equipment in the UK.


On 1 January the Postmaster-General took over the system of the National Telephone Company at a cost of £12,515,264, inheriting 9,000 employees, 1,500,000 miles of wire and 1,565 exchanges - of which 231 had more than 300 subscribers each. The National Telephone Company provided for 561,738 subscribers altogether. Just under 70 exchanges were of the Central Battery type; most of the rest were of the magneto type.

For the first time a unified telephone system was available throughout most of Britain. From this date the Post Office became the monopoly supplier of telephone services with the exception of the remaining municipal services in Hull, Portsmouth and Guernsey. There followed a period of rapid expansion. In the next three years no fewer than 450 new exchanges were opened in places where there had previously been no telephone service.

The first experimental public automatic telephone exchange installed in the UK was opened for service at Epsom, Surrey, on 18 May. The equipment used was of the Strowger two-wire type and was supplied and installed by the Automatic Telephone Manufacturing Company Ltd of Liverpool. It had a capacity of 500 lines, and was the forerunner of the standard Strowger equipment adopted by the Post Office from 1922.

On 13 July another Strowger-type exchange was opened for service at the General Post Office, London. It was intended for Post Office use as a private branch exchange and was known as 'Official Switch'. Its equipment was for 900 lines, with an ultimate capacity of 1,500 lines, and it enabled GPO engineers to observe its technical performance and gain experience of its working.

The SS Titanic sank with great loss of life on 15 April after hitting an iceberg. But 700 passengers who would otherwise have been lost were saved as a result of a distress call by wireless telegraphy.


The telephone system provided by the Corporation of Portsmouth was transferred to the control of the Post Office in Great Britain, leaving the Post Office as the only provider of a telephone service, other than Hull Corporation and the States of Guernsey.

The first 'Keith Line Switch' non-director exchange with remote manual board was opened at Chepstow ).


A junction telephone service was inaugurated between Liverpool and Manchester.

A submarine telephone cable was laid between Dover and Dunkirk.

A telephone service was opened with Switzerland.

Hull Corporation's licence to operate a local telephone service was renewed on the understanding that the Corporation would purchase the ex-National Telephone Company's nine exchanges in the area for £192,423. These, together with responsibility for 9,126 stations and 197 call offices, were transferred to the Corporation.

The third automatic telephone exchange in this country was opened at Hereford on 1 August. The Lorimer system, as it was known, was built by the Canadian Machine Telephone Co and had a 500line capacity. It had been patented in the United States by E A Faller (US Patent No. 686892) for a 'well-designed mechanism performing a definite cycle of operations and driven by some source of power'. The power source used was, in fact, a constantly revolving shaft with a mechanical clutch, comprised of toothed wheels, brought into operation by an electro-magnet. The 100-point rotary switch with switched 'wipers' (part of the selecting device) passed over the contacts in one direction only. An unusual feature of this system was a lever-calling device on the telephone on which the caller composed the number by adjusting the levers. The caller could see and check the number before turning a crank and lifting the receiver to set the calling mechanism in operation. The subscriber could pay for two, three or more number composing levers, allowing the selection of local, intermediate or longer distance calls. Hereford was the only exchange of the Lorimer type installed in this country and remained in efficient working order for more than 11 years. Ultimately, the Post Office decided on the Strowger system as its standard in 1922.

A Western Electric Company Rotary type automatic exchange was opened at Darlington for public service on 10 October. It was similar to the Lorimer system in the use of power-driven selector switches, but it featured the 'Register', a device to receive the subscriber's signals from a rotary tenhole dial and to store them for subsequent control of the switches.

Another exchange of this type was opened at Dudley on 9 September 1916 - but with the adoption of the Strowger system as the Post Office standard automatic exchange in 1922, it saw little further service in this country, although it was popular in Europe.


The 'Archangel' submarine telegraph cable was laid between Great Britain and Russia.


The Post Office made the first effective use of amplifiers on telephone circuits when research staff installed experimental repeaters in the London to Belfast and London to Dublin circuits at Liverpool. A few weeks later, the first permanent repeaters were installed in the London to Liverpool cable at Birmingham. The installation of these vacuum tube repeaters was the first commercial use of such equipment.

HMTS Monarch (No. 3) of 1,150 tons joined the Post Office Cableship fleet, remaining in service until being sunk in April 1945 off Southwold, Suffolk. She had already seen damage the previous year in 1944 when she was mistakenly shelled by an American destroyer.


A bomb dropped by enemy aircraft struck the Central Telegraph Office on 7 July. Damage was caused to the South East corner of the fourth floor. A section of the roof parapet fell down and killed a soldier on sentry duty in the street, but no Post Office people were injured. A journalist who witnessed the attack later claimed that the bombing of the CTO was 'the only instance of a direct hit by German raiders of an object they aimed at'.

The London-Halifax (Nova Scotia) direct cable telegraph link was established, using syphon recorders and Judd & Fraser direct printers. The cable was purchased by the Post Office from the Direct United States Company and opened for traffic on 18 July.

A telephone junction service was opened between Edinburgh and Glasgow on 1 April.


Leeds automatic telephone exchange was opened on 18 May in Basinghall Street - a Strowger-type manufactured and installed by the Automatic Telephone Manufacturing Company. It was the largest of its kind in Europe, equipped for 6,800 lines with an ultimate capacity of 15,000, and the first exchange in this country capable of being extended to give service to 100,000 subscribers. It was also the first in which the caller was required to dial five figures for every local call.

HMTS Alert (No. 2) of 941 tons and of similar design to Monarch (No. 3) was launched. Like her sister ship she gave faithful service during World War II, but was sunk with all hands in February 1945 off the North Goodwins.

A Siemens Brothers & Company type automatic exchange was opened at Grimsby on 14 September 1918. It was similar to the Strowger system in many respects, but differed in the form of line switch employed and because the connectors were controlled entirely by relays. The characteristic feature was the 'Preselector', a rotary line switch provided for each subscriber's line to find a disengaged trunk to a selector.

Further Siemens type exchanges were opened at Stockport on 23 August 1919 and at Southampton on 30 June 1923, but the Post Office had decided on the Strowger system as its standard automatic exchange in 1922.

The Wireless Telegraphy Board was set up to coordinate interference problems in radio communication in the English Channel, thereby beginning the frequency management structure that exists today.

The first interdepartmental committee to be established in the UK, the Wireless Telegraphy Board reported back to the Imperial Communications Committee on national (domestic) communication matters. With the outset of World War II, it became a military board known as the British Joint Communications Board (BJCB) and operated as a supporting agency of the Combined Communications Board in Washington, based in London. Following the end of the war it became the British Joint Communications-Electronics Board, and the Wireless Telegraphy Board was disbanded. The interests of users of radio other than Government departments were represented by the Post Office.

The Wireless Telegraphy Act 1949 vested responsibility and the necessary statutory powers with respect to regulating the use radio frequencies in the Postmaster-General. In 1968, in preparation for the change of status of the Post Office, the PO Engineering Department brought together in one unit engineers who were responsible for the numerous technical aspects of radio regulatory work. This unit then transferred to the new Ministry of Posts and Telecommunications in 1969.

When the Ministry was abolished in 1974, responsibility for radio regulation passed to the Home Office in a newly created Radio Regulatory Department. The Department was divided into eight technical branches: broadcasting services; radio interference; regulatory and monitoring; common services; land mobile; space services; microwave and maritime; and long range planning.

The Department moved to the Department of Trade and Industry in 1983, seen as a logical move given the Ministry's responsibility for telecommunications, information technology and innovation. The Department was re-titled the Radio Regulatory Division (RRD).

A further change of name occurred in 1986 when the Radio Regulatory Division became the Radiocommunications Division. Finally, the Division became the Radiocommunications Agency in 1990, under the Government's Next Steps programme.


G A Campbell, an American, invented the anti-sidetone telephone circuit. In the older type of telephone circuit the power from the transmitter was divided between the line and the local receiver, so that the caller heard his own voice. This was called ' sidetone'. In the circuit which G A Campbell devised this unwanted current was considerably reduced, leading to greater efficiency.

Private Automatic Branch Exchanges (PABXs) were introduced.

The first wireless telegraph point-to-point service was opened with the Continent.

A telephone conversation by wireless radio was exchanged on 19 August between Sir Samuel Instone of the Instone Air Line from a private residence in London to an aeroplane in flight to Paris. The plane was a Vickers G-EASI and was fitted with an AD2 pilot operated radio-telephone piece of equipment.

The Post Office commenced its long-distance radio-telegraph service to ships.


The telephone system provided by the Corporation of Portsmouth was transferred to the control of the Post Office in Great Britain, leaving the Post Office as the only provider of a telephone service, other than Hull Corporation and the States of Guernsey.

The first 'Keith Line Switch' non-director exchange with remote manual board was opened at Chepstow ).


The first 'relay' automatic exchange for the public telephone service in this country was provided for the Post Office at Fleetwood, Lancashire by the Relay Automatic Company (originally set up as the Betulander Automatic Telephone Company by Marconi's Wireless Telegraph Co Ltd in 1913). It was opened for service on 15 July.

The relay system was developed from that devised by Gotthief Angarius Betulander, an engineer in the Swedish Post Office and, as the name 'relay' suggests, was dependent on electro magnetic relays for performing the switching function. There was thus no frictional wear and the system was an entirely different concept from electro-mechanical type such as Strowger which involved the moving of a brush on a wiper over a number of contacts. In principle, the relay system, with its use of markers and relay crosspoint matrix and link trunking, foreshadowed the later crossbar and reed-electronic exchanges (although the crossbar switch itself had already been invented).

However, it was the Strowger system which was finally adopted by the Post Office (see below), and the relay system was considered better suited for small Private Automatic Branch Exchanges (PABXs). The first installed for the Post Office was brought into service at Debenhams in Wigmore Street, London, on 8 December 1923. After a series of full scale experiments in which different automatic telephone systems had been tried (including the Lorimer system in Hereford, Strowger system in Leeds, Western Electric rotary system at Darlington, Siemens system at Grimsby, and the relay system at Fleetwood, the Post Office decided to adopt the Strowger system as its standard. By the spring of 1924, Britain had nearly 265,000 lines working on 23 automatic exchanges, from a capacity of 25 line to 15,000, and by seven different manufacturers. Strowger exchanges became the backbone of the UK telephone network and remained a key component for over 50 years. The last Strowger exchange, Crawford in Scotland, was not removed from service until 23 June 1995 .

It had been thought that there might be difficulties using the Strowger system in very large cities such as London where numbers of large exchanges, and consequently a great number of inter-exchange calls, created a highly complex interconnected network. A number of solutions were put forward, but the problem was solved when the Automatic Telephone Manufacturing Co Ltd of Liverpool, working in conjunction with the Post Office, developed the 'Director'. This was a Strowger system with a number storage and translation facility which could 'direct' telephone calls through the complex network of circuits linking exchanges in large cities. This was achieved by the translation of the digits dialled by a calling subscriber to other numbers in order to direct the call over the most convenient route to the required exchange. The Director system also included the facility for calls to be dialled from automatic to manual exchanges where the required numbers appeared visually before the operator handling the incoming call, who then completed the connection manually. This Coded-Call Indicator (CCI) facility meant that a subscriber connected to a London automatic exchange dialling the number of a subscriber on a London manual exchange would be unaware that the call was not completed automatically. In addition, there would be no change of procedure for the subscriber once the manual exchange had been converted to automatic working. This was an important advantage, as the transition from manual to complete automatic working would not be concluded for very many years.

One feature of the decision to adopt the Strowger system was the many thorough economic planning studies made by the Post Office to determine the conditions justifying the adoption of automatic working. These studies demonstrated the need to be able to extend an exchange over a ten-year period and hence the requirements for uniformity of design, constructional and circuit practices. Another essential feature was pooling of patents amongst the British manufacturers of automatic exchange equipment to standardise all Strowger equipment construction. This co-operation between the Post Office and the manufacturers led to the first Bulk Supply Agreement the following year.

The telephone system in Southern Ireland was transferred to the Eireann Administration (then the Irish Free State); 194 telephone exchanges with 19,037 lines and 553 call offices passed into the control of the new administration.

The first automatic exchange in Hull was opened in Queen's Road.

A telephone service was established with the Netherlands (Holland) on 15 August.

The first trials with teleprinters were staged.

Experimental transmitters were not uncommon at this time and in this year the Marconi Wireless Telegraph Company began public broadcasting.


The first of the series of so-called 'Bulk Supply Agreements' between manufacturers and the Post Office was signed in this year, the first being the Telephone Exchange Equipment Bulk Supply Agreement (TEEBSA) for the supply of automatic exchange equipment. It was signed between the Post Office and the four manufacturers (Automatic Telephone Manufacturing Co, General Electric Co Ltd, Siemens Brothers Ltd and Standard Telephone & Cables). It marked the beginning of the progressive development and standardisation of the British telephone system over the next 40 years following the adoption of the Strowger system of step-by-step working using two motion selectors in 1922). There were clear advantages for all parties to the agreement: manufacturers avoided having to tender for all exchanges, parallel development work was unnecessary, manufacturers all had a 'fair' share of available Post Office business, and advantageous prices were negotiated for the Post Office. The Agreement was renewed a number of times and a fifth manufacturer, Ericsson Telephones Ltd, became a party to it in 1927.

The establishment of the British Telephone Technical Development Committee in 1933 contributed to effective standardisation of the system. Throughout the 1950s and 1960s, however, there was a progressive abandonment of the TEEBSA and other bulk supply agreements in favour of competitive tendering. The TEEBSA was eventually terminated in October 1969 when competition for the supply of step-by-step equipment was introduced. Other bulk supply agreements with manufacturers concerned the following:-

  • Loading Coils, 1931-1963

  • Cable, 1931-1963

  • Batteries, 1931-1953

  • Telephone Subscribers Apparatus, 1933-1968

  • Transmission (Audio and Voice Frequency Telegraph)

  • Equipment, 1936-1946

  • Cordage and Cords, 1936-1952

A licence was granted to the States of Jersey to operate a local telephone service: 15 exchanges with 1,639 lines and 26 call offices were transferred to the States Department of the island at a cost of £32,000.

Communication across the Atlantic by wireless telegraphy was established for two hours on 14 January. Speech passed from Rocky Point, Long Island, to the Western Electric Company's factory at New Southgate, North London.

The British Broadcasting Company (BBC) was set up by Western Electric, Marconi, General Electric, British Thomson-Houston, Radio Communication and Metropolitan Vickers. It received its licence for regular broadcasting of programmes of speech and music, and opened stations in London, Birmingham, Manchester and Newcastle-upon-Tyne.

The minimum fee from London call offices was reduced from 3d to 2d in July.


Following the development of the beam system (short wave point-to-point radio telegraphy), the Marconi Wireless Telegraph Company entered into an agreement with the British Government in November for the provision of stations to set up an Imperial Wireless Chain in England, Australia, Canada, India and South Africa.

The first Siemens No. 16 automatic Non-Director exchange was opened at Swansea. It was based on the step-by-step system and was also used later at Edinburgh, Sheffield, Brighton and Leicester exchanges. It was similar in design to what had become the standard automatic system in 1922, and many of its features were reproduced in the design of standard circuits.

Telephone No. 150 was introduced. Similar to earlier telephones in that it was a candlestick model, it was innovatory in introducing the dial to most subscribers for the first time. Reflecting the progress of automatic switching, the dial operated the automatic exchange switching mechanism by sending out a series of electrical impulses corresponding to the number being dialled. It was no longer necessary for the operator to connect all calls. Where a No. 150 was still connected to a manual exchange, the space in the base of the telephone for the dial was covered by a dummy insert (used as a number label holder) which could be replaced by a dial when the exchange went automatic.

A competition to design a new kiosk was organised and several leading architects were invited to submit designs. Models were placed on view behind the National Gallery and selection was made by the Fine Arts Commission. The winner was a design by Sir Giles Gilbert Scott and, after a slight modification to the door and change of material from mild steel to cast iron, it was adopted by the Post Office and designated Kiosk No. 2, or K2.

Some important improvements to the door mechanism and window arrangement were contained in the kiosk. The glass was deliberately made into small panels so that breakages could be repaired with a minimum of renewal. There was also a ventilation system which worked through perforations in the dome. Because of its cast iron construction it weighed approximately 1.5 tons and had more interior space than its predecessor. The most distinctive feature was undoubtedly the bright red colour scheme. The kiosk's introduction in 1927 was mainly confined to London and some large provincial towns and proved to be very successful. It was eventually made obsolete in June 1936, although a number continue to be found in London today and very few in other large cities. A number have been designated as Grade II listed buildings and will continue to be preserved.

Gilbert Scott's original model of what was to become the K2 still stands outside the National Gallery, at first glance identical to its progeny although it is in fact different in some details, principally in its wooden construction.


As a result of economic planning studies to determine the conditions justifying the adoption of automatic working the Engineer-in-Chief laid down the following criteria for automatic working:

  • the average subscriber's calling rate should not be less than five calls per day

  • not less than 4,000 calls per day should need to be switched automatically

  • not more than 40 per cent of the originating calls must involve manual handling.

The Electrophone exchange was closed on 30 June. The Electrophone service had been transmitted over the telephone network of the National Telephone Company, and later that of the Post Office, by the Electrophone Co. Ltd. from the 1890s. Effectively what would today be regarded as a cable company, the Company folded after the closure of the Electrophone Exchange, which followed the decline of the service in the face of competition from the increasingly accessible and varied programmes of the BBC radio service.

A new type of coin-box was introduced, the well-known Button A and Button B prepayment equipment, and for over 25 years its design remained unchanged despite various developments in the design of kiosks. It was usually installed in both automatic and central battery manual exchange areas. To make a call in automatic areas, users inserted the appropriate fee which prepared the circuit for dialling. In manual areas, callers were connected to the operator on insertion of the call fee and, in both cases, the caller then depressed Button A. This allowed the coins to be deposited into the cash box and the call to be transmitted. If a call could not be connected for some reason, or if there was no reply, Button B was depressed, the line was disconnected for five to seven seconds and all the coins were returned to the caller.

Although 6d (2p) and 1/- (5p) slots were available for other calls, the minimum fee necessary to make a local call at the time was 2d. The mechanism was originally designed to check the presence of two pennies by a weighing operation. It was set to a minimum and maximum acceptable weight for the coins as a safety margin, but as the fee was gradually increased to 3d and then 4d the safety margin became smaller and eventually unacceptable. A mechanical counter was considered too expensive as the modifications needed would have been too many and too complex. To overcome this problem a new mechanism was devised by Hall Telephone Accessories Ltd and was in effect a combination of the two basic methods: three pennies were checked by weight and the mechanism waited for the insertion of the fourth penny before allowing the call. The system required the smallest amount of additional equipment and could be easily fitted. A limitation was that it could not be easily adapted for an increase beyond 4d.

In 1959 the first versions of the new Pay-on-Answer payphones were being introduced and at the end of the 1950s began to supersede the 'Button A and B' models. This was made necessary following the introduction of Subscriber Trunk Dialling (STD) in major towns which allowed no reasonable modification to enable the 'A and B' box to be used to pay for automatically connected trunk calls. However, some 'A and Bs' remained in active use in Scotland until 1992. The primary reason for their retention lay in their remote locations. Because the boxes functioned on a single-channel radio link there was no reasonable solution for many years that would allow the use of Subscriber Private Metering (the principle on which the latest pre-payment payphones operated).

The London to Glasgow trunk telephone cable with repeaters was completed to form the backbone of the British trunk network.

Large multichange exchange areas were developed between now and 1927. Satellite exchanges were built to radiate around a main exchange to serve the centre and environs of a large provincial city, using a linked numbering scheme. Early examples were established during this time at Leeds, Edinburgh and Sheffield.

Western Electric's interests outside the USA were taken over by International Telephone Corporation (ITT). As a result Western Electric Limited in England was renamed Standard Telephones & Cables Limited.

A beam wireless telegraph service was established with Montreal, Melbourne, Cape Town and Bombay.


The Post Office long-wave wireless station at Hillmorton, near Rugby with worldwide range, was brought into service on 1 January, known as Rugby Radio Station. The station used a huge water-cooled transmitter (call sign GBR), dissipating 10kW and using 54 thermionic valves on a wave length of 18,750 metres. Initially, it commenced transmission in Morse code on 16kHz with an aerial power of 350kW. At the time it was the world's most powerful transmitter using thermionic valves. Later in the same year two-way conversation by radio telephone was also established for the first time between England and the USA from Rugby.

A continuous telephone service was established with Germany by through circuit.

J L Baird (1888-1946) demonstrated television before the Royal Institution on 27 January.

A beam wireless telegraph service was established with Montreal, Melbourne, Cape Town and Bombay.


The British Broadcasting Company became the British Broadcasting Corporation on 1 January.

A regular public transatlantic telephone service from London to New York using long-wave radio transmission on a wavelength of 5,000 metres (60kHz) was begun on 7 January at 1.45 pm. The original tariff was £15 for three minutes, reduced to £9 the following year.

The first director exchange in Europe was opened at 270 High Holborn and was known as Holborn Tandem. It provided a switching centre for exchanges in the Director Area which were not in direct communication. (The director technique allowed the Strowger automatic system to be used in large cities, using a three letter exchange code in front of the number, and was introduced in 1922.)

Cast iron kiosks were introduced (Kiosk No. 2), designed by Sir Giles Gilbert Scott. The installation of this kiosk was confined to London (where many can be seen today) and some large provincial towns following a competition held in 1924.

The No. 4 kiosk was introduced. It was first proposed in 1923 and a prototype was erected in Bath in 1926. In addition to the telephone it contained facilities for buying stamps and posting letters. The standard No. 4 kiosk was designed by the Post Office Engineering Department on the basis of the successful No. 2 and received final approval in 1927. It was constructed in cast iron and was considerably larger than any of the other types. Painted vermilion outside and a flame colour inside, it gained the nickname of 'The Vermilion Giant'. Only 50 of these kiosks were ever made, at an original cost of £50 6s 9d each. They were intended to be a miniature Post Office, located where no such facilities existed or where expense prevented a sub-post office from being built. Unfortunately these kiosks were unsuccessful. Many people complained about the noise of the stamp machine while they were using the telephone, and the rolls of stamps in the machine tended to become soggy in damp weather. For these reasons, and because of the high unit cost, the Post Office decided in 1935 that no further kiosks of this type would be installed.

The London Toll system was divided between Toll 'A' and Toll 'B' exchanges because of the increase in Toll traffic which made it necessary to divide the direction of originated traffic. Toll 'A' manual exchange opened on 3 December on the 5th Floor, GPO South, Carter Lane, EC4 to handle traffic outwards. The old exchange at Fetter Lane, opened in 1921, became known as Toll 'B' and handled traffic into London .

An international time signal was broadcast throughout the world from Rugby Radio Station. A joint development with the Admiralty and Board of Trade, it was intended to assist mariners. The time signals were generated from the Royal Greenwich Observatory.

In 1949 quartz clocks provided by the Post Office replaced the mechanical pendulum clocks in the Greenwich Time Signal (GTS) generating apparatus at the Royal Observatory. These clocks continued in use until 1967, when caesium atomic standards were introduced.

Rugby still transmits the Greenwich Time Signal, which is derived from the National Physical Laboratory's atomic resonance standard. The laboratory is now the UK's national centre for time - its atomic clocks generate the UK's time standard, which is made available via transmissions from Rugby Radio Station. The BBC's "pips" are derived in part from the same signal (the BBC has been responsible for generating the 'pips' since 5 February 1990 when it assumed the role from the Royal Greenwich Observatory).

Telephone service was established with Austria, Denmark, Norway and Sweden.


The first automatic exchange in the City of London was opened at Bishopsgate.

An experimental wireless transmission of still pictures was carried out by the BBC on 30 October.

The Post Office standard non-director exchange system was introduced. This meant that the Post Office had now standardised on the basis of two forms of equipment: non-director for use in provincial areas and director for use in exchanges in large cities (see 1924 entry). On non-director exchanges the proportion of out-going traffic compared with that of director exchanges was comparatively small. Therefore, the general principle of backward holding (the bridge being located in the final selector) was adopted on non-director systems, whilst forward holding (from the first selector) was used on director exchanges.

Creed's Teleprinter No. 3 was adopted as the standard inland telegraph instrument.

Telephone service was established with Czechoslovakia, Gibraltar, Hungary, Italy, Luxembourg, Mexico, Portugal and Spain.


The New York Wall Street stock market crashed - an event probably stimulated and speeded by the use of the telephone for the panic selling of shares.

The development of the immersed electrode principle in transmitter design made it possible for the Post Office to introduce two new innovative telephone designs (Teles 162 and 232). These were the first instruments to successfully incorporate a 'hand combination' (a handset with combined receiver and transmitter) which could be used with central battery lines. Provision was made in the circuit to reduce sidetone. The new designs were also revolutionary in their use of plastics, being among the first large-scale production items to be produced in 'Bakelite', and there was now a choice of colours.

The first standardisation rural automatic exchange was opened at Haynes near Bedford on 4 February, a 100-line unit (No. 5) (see 1921 entry).

Cable & Wireless Ltd was registered on 1 April, formed as a result of an Imperial Telegraph Conference of 1928. Previously UK telegraph services with places outside Europe were conducted by telegraph companies, with the exception of wireless circuits with the Commonwealth and two Anglo-Canadian cables, which were worked by the Post Office. However, as the Post Office long-distance wireless services were generally cheaper than the cable services, the telegraph companies were threatening to dispose of the cable system. For strategic reasons it was felt necessary to retain the cables under British control and the solution settled upon by the Conference was to merge the British wireless and cable interests. Accordingly, the Post Office was required to hand over the 'beam' wireless stations and the two Anglo-Canadian cables to the new company on a 25-year lease. The company was to operate on semi-public utility lines and was to be controlled by the Imperial Communications Advisory Committee (see following entry).

The Imperial Communications Advisory Committee was constituted to advise the Government on technical questions, and international and Commonwealth issues. It comprised representatives of the defence services, the Post Office and the Commonwealth, and was chaired by a cabinet minister. In 1944 it was renamed the Commonwealth Communications Council and became the Commonwealth Telecommunications Board in 1949.

Kiosk No. 3 was introduced, again designed by Sir Giles Gilbert Scott. This kiosk was intended for sites of special architectural importance, scenic localities and for general outdoor use in rural and urban areas. In August 1930 it was decided to adopt the No. 3 as standard for rural areas once the stock of No. 1's had been exhausted. The actual design was very similar to the No. 2 kiosk but was made largely from concrete instead of cast iron. Only the window frames were painted red, with the rest of the kiosk being painted a stony grey colour. Because concrete was a rather poor material for telephone box construction this was the last standard box to employ its use.

A new building at Rugby Radio Station to house the shortwave transmitter ("A" Building) was opened.

A telephone service was opened between the Isle of Man and the mainland on 28 June.

A personal call service was introduced throughout the British inland trunk and toll telephone service on 1 August.

'Metropolitan', 'National' and 'Empire' automatic telephone exchanges were opened in Wood Street, Cheapside, London on 31 August.

An audioconferencing 'conference communication' system composed of transmitters and loudspeakers was used on 23 October to connect audiences in Manchester, Liverpool, Birmingham, Glasgow, Leeds, Newcastle, Cardiff, Southampton and Portsmouth with the Institution of Electrical Engineers in London.

On Monday 2 December, 22 experimental police telephone boxes, installed as part of a new scheme for policing were made available for general use in the Barnes, Kew and Richmond District of 'V' Division, Metropolitan Police District.

The BBC extended its services to include broadcasts of television.


A picture telegraph (facsimile) service between the Central Telegraph Office and Berlin was opened on 7 January. Services to other European cities soon followed.

On-demand trunk service was introduced based on a new transmission and routing plan in which zones were divided into groups. The principal exchange in each group, the Group Centre, had operational control of originating traffic for all dependent exchanges in the group.

A radio-telephone service was opened with Australia on 30 April. The service was extended to South Africa and Argentina later in the year.

Automatic metering up to 3d (just over 1p) was introduced on director exchanges.

A motor cycle telegraph messages service was inaugurated at Bournemouth.

The Manchester Director Area was opened, encompassing the Ardwick, Collyhurst and Moss Side exchanges.

Advice of duration and charge (ADC) at callers' request was introduced.

Control of Toll traffic in London was devolved upon local auto-manual switchboards.


The first voice-frequency telegraph system with 12 carrier channels was installed between London and Dundee. By means of voice-frequency dialling, operators at zone centres were able to dial directly to subscribers in distant zone centres, thereby avoiding the cost and delay involved with incoming operators.

The first 200-line unit automatic exchange (No. 6) was opened.

The page-printing teleprinter (the Teleprinter 7B) was introduced by Creed.

The Birmingham Director Area was opened encompassing the Harborne, Northern and Victoria exchanges.

A telephone cable was laid to the Channel Islands.

Telephone service was established with New Zealand.

An engineering complaint and repair service was made directly available to director subscribers by dialling 'ENG' and to some non- director subscribers by dialling '97'.

'Micro-Ray' (microwave) communication was first demonstrated by STC between Dover and Calais.


The International Telecommunications Union (the oldest of the intergovernmental organisations which form the specialised agencies of the United Nations) was created from the International Telegraph Union and the International Radiotelegraph Union.

The Bridgeman Committee was set up under the chairmanship of Lord Bridgeman to investigate criticisms that the Post Office, as a large-scale commercial undertaking, should be run along the lines of a business concern rather than as an ordinary government department. This criticism had culminated in a submission to the Prime Minister of a memorial signed by 320 Members of Parliament asking for an enquiry into the status and organisation of the Post Office with a view to effecting any necessary changes in its constitution.

The Bridgeman Committee's report, published in the same year, found no change to be necessary to the existing Parliamentary control, but drew attention to defects in the organisation.

The original structure of the Post Office telephone service was modelled on that of the National Telephone Company. Thus, on the commercial side the local operational unit was the Surveyor's District of which there were 13, excluding London. The Surveyor was responsible for the postal, telegraph and telephone services: on the telephone side he was assisted by District Managers who, in conjunction with Head Postmasters, were responsible for the provision and the quality of the telephone service in their districts. Responsibility for the telegraph service was divided between the Surveyor's Office and the Head Postmasters.

However, none of these officials had any control over the engineering aspects of the telephone and telegraph services. The engineering field was the responsibility of totally separate Superintending Engineers Districts, each under the control of a Superintending Engineer who had a number of Sectional Engineers working to him. The organisation was further confused by the fact that neither the District Managers' and the Sectional Engineers' Districts, nor those of the Surveyors and the Superintending Engineers were conterminous. Moreover, the engineering and non-engineering sides were each responsible to separate headquarters in London: the Superintending Engineer to the Engineer-in-Chief and the Surveyor to the Secretary's Office. This centralisation of authority in London prevented real local responsibility, and the separate rigid hierarchies prejudiced effective co-ordination of operational and engineering effort.

A departmental committee under the chairmanship of Sir Thomas Gardiner was then appointed with the aim of promoting efficiency in Post Office organisation and to deal with the application of the substantially increased decentralisation recommended by the Bridgeman Committee.

The Gardiner Committee's recommendations, published in its report of 1936, led to the setting up of eight regions in the provinces, each in the charge of a Regional Director responsible for the control and co-ordination of all Post Office services within his region. Additional to these eight provincial regions, two further regions were set up in London - one for Posts and one for Telecommunications. The provincial regions were divided into Head Postmasters' districts for the management of the postal and the telegraph services (in practice these were already in existence).

The telephone service regions were divided into telephone Areas under Telephone Managers, of which there were ultimately 57 for the provinces and nine in London. Telephone Managers, with Head Postmasters acting as their agents on certain matters, were to be responsible for the day-to-day control of all aspects of the telephone service (engineering, traffic, sales and accounts). They were also to be accountable to the Regional Director for the overall efficiency of the telephone service in their territory. The first two regions (Scotland and North East) were set up in 1936, followed by the two London regions (Telecoms and Postal), and the changes throughout the country were in place by 1940.

With this large degree of devolution to the regions, there was now a need for central co-ordination and an overall scrutiny of Regional performance, as ultimate responsibility still remained with the Headquarters Administration. To deal with posts, telecommunications, buildings and staff pay, five committees were constituted when the earliest Regions were set up. These were:-

Standing Postal Estimate Committee (SPEC)

Standing Telecommunications Advisory Committee (STAC)

Standing Factories Advisory Committee (SFAC)

Clerical Estimates Committee (CEC)

Standing Motor Transport Advisory Committee (SMTAC), which was set up the previous year in 1935.

The task of these committees was to scrutinise annual estimates, compare actual with estimated expenditure, and to study performance statistics. The committees were composed of representatives from relevant departments and each committee included representatives of the Accountant General's Department.

The Post Office introduced the Telex Printergram service. The 'Telex' Exchange, opened on 15 August, enabled teleprinters to be used on telephone subscribers' lines for intercommunication and for transmission of telegrams to the Central Telegram Office. Teleprinters 7B were used.

The first ultra-short-wave radio telephone link, used as part of the inland telephone network, was set up across the Bristol Channel, over a distance of 13 miles.

The first submarine cable for carrier working was laid from Britain to La Panne in Belgium. It contained 120 wires arranged as four-wire circuits and provided 90 telephone circuits using 1+2 carrier equipment.

The Post Office introduced trunk service on demand, relieving telephone users of the need to book trunk calls in advance.

The Post Office introduced telephones with anti-sidetone induction coil. The anti-sidetone telephone circuit had been invented in 1920.

The first British experiments in carrier telephony were carried out using the London-Derby cable.

The first large centralised Directory Enquiry Bureau was opened in August.

Telephone service was established with Canada (direct), South Africa and the USSR.

Sleeve-control switchboards were introduced. These permitted any position and any cord circuit to be used to handle any type of trunk circuit.

A standard switchboard was introduced for police telephone and signal systems.

The first 'Strowger' type non-director exchange with a remote manual board was opened at Horsforth.


Imperial Chemical Industries Ltd. discovered polyethylene, or polythene as it became known. This material, because of its low dielectric constant, became widely used for submarine cable insulation in place of gutta-percha and rubber, and for many other purposes in telecommunications.

Telephone service was opened with India, Northern and Southern Rhodesia and Turkey.

Phonogram work was transferred from telephone to telegraph staff.

'Demand' trunk service was extended to group centres.

The first nine-channel (bothway) voice frequency telegraph system (using a four-wire telephone circuit) was brought into service. This system provided automatic calling clearing and supervisory conditions over long-distance circuits.

The British Telephone Technical Development Committee (BTTDC) was set up to co-ordinate development work between the Post Office and the five manufacturers party to the Telephone Exchange Equipment Bulk Supply Agreement. These manufacturers - ATE, Associated Electrical Industries, Ericsson Telephones, GEC and STC - were represented on the Bulk Contracts Committee which allocated telephone exchange business on an equal share by value basis. Before the creation of the BTTDC each manufacturer had individually carried out their own design and development for Post Office contracts. As a result of the setting up of the BTTDC all development work for the Post Office was shared between the five parties and all information produced for the Post Office was to be known to all parties. The aim was to standardise equipment design and obviate parallel development. The Post Office and its five exchange equipment suppliers were now able to coordinate further development and promote a high degree of standardisation of circuitry and components, particularly of relays and selectors.

A separate exchange for international calls was opened at Faraday Building in Queen Victoria Street, London. It had 121 sleeve-control positions equipped for 480 circuits. Known as the 'switchboard of the world', cable and wireless telephone channels radiated from Faraday across the globe. The later use of high-frequency radio circuits, which involved rather different operating techniques, required the opening of a specialised exchange in Wood Street.


H S Black, an American, formulated the principle of negative feedback, revolutionising the design of telephone repeaters.

On 1 October, the Post Office introduced cheap night rates - 1s (5p) maximum - for trunk telephone calls as part of the Kingsley Wood (the then Postmaster-General) plan for advertising and popularising the telephone.

The transferred-charge service was first introduced on the inland telephone system in this year. This enabled callers to have a call made through an operator charged to the person receiving that call.

Kiosk No. 5 - the K5 - was introduced. It was a transportable kiosk made of steel-faced plywood, which could be assembled and dismantled, for use at exhibitions and other temporary locations. It is not known how many were made, and none appear to have survived to the present day.

Short-range radiotelephone service with coastal ships was opened via the Seaforth Radio coast station.

The first 800-line Unit Automatic Exchange (UAX 7) was introduced.

The first ultra-short-wave radio telephone link (London-Belfast) was opened.

The first commercial use of a microwave radio link was introduced, between Lymne in Kent and St Inglevert in France, 35 miles apart.


Automatic metering up to four units (4d) was introduced on Unit Automatic Exchanges, on the UAX 12 and later on the UAX 13 and 14 types.

The first standardised UAX 12 (100-line unit) was introduced.

1+2 carrier transmission was introduced.

The first telegraph four-channel bothway voice-frequency system using a two-wire telephone circuit was introduced.

Teleprinter ancillary working was introduced.

The first telephone multi-channel working (three channels per open-wire circuit) was introduced.


The speaking clock was introduced, a service at first available only in London at Holborn Exchange. The Post Office had held a competition to decide on the voice to be recorded, and subscribers dialling TIM would hear the 'golden voice' of Miss Jane Cain, a London telephone operator, giving the Greenwich time correct to one-tenth of a second.

The accuracy of the speaking clock was calibrated and corrected by referencing to a time signal from the Royal Greenwich Observatory which was broadcast by Rugby Radio Station.

The voice of Jane Cain was replaced by that of Pat Simmons in 1963.

Kiosk No. 6 - the K6 - was introduced to commemorate the Silver Jubilee of the coronation of King George V. The 'Jubilee Kiosk', as it became known, was once again designed by Sir Giles Gilbert Scott and was similar in appearance to Kiosk No. 2, the main difference being that the vertical bars in the windows and door were spaced further apart to improve visibility. The K2 had not penetrated far outside London, but the 'Jubilee' model became the first genuinely standard kiosk and was installed all over the country.

Under the "Jubilee Concession", introduced as part of that year's celebrations, kiosks were to be provided in every town or village with a post office, regardless of cost. As a result of this scheme over 8,000 new kiosks were installed, adding impetus to the spread of the K6.

In the following year, the "Tercentenary Concession" was introduced: if a local authority committed to paying £4 a year, then the normal subscription, for five years then the Post Office would install a kiosk on request almost anywhere. This scheme remained in force until 1949, and led to almost another 1,000 K6s being introduced. The "Rural Allocation Scheme" was introduced to replace it: kiosks were allocated to rural areas and installed where recommended by a rural local authority, whether likely to prove profitable or not.

The 'Jubilee Kiosk' is perhaps the best remembered example of Gilbert Scott's work (with the possible exception of Liverpool Cathedral) and is to this day fondly regarded as a typical British landmark. K6s survived the introduction of Nos. 7 and 8, but during the 1980s and early 1990s were frequently replaced with the modern KX 100 - 400 series of payphone booths. Thousands of old K6 kiosks were sold off at public auctions. Some were scrapped, but many more were put to a variety of imaginative and bizarre uses in private hands. However, the Department of the Environment and English Heritage worked with BT to identify kiosks, including more than 1,000 K6s, worthy of listing as being of special architectural and historical interest, mainly near existing listed buildings or in attractive town and country locations.

BT's approach had now almost gone full circle: instead of replacing them, the policy came to be to retain and reintroduce K6 kiosks in situ whenever practical, even if not listed. In 1999 there were over 15,000 of these old style kiosks in heritage sites, and the K6 kiosk was by now a registered design of British Telecommunications plc. From November 1997, BT licensed K6 kiosks for use by competitors.

In 1999, BT operated a network of over 140,000 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.

The 'Pip' tone signal was provided on timed calls as a regular feature for the first time from 15 August.

The world's first 12-channel carrier cable for commercial traffic was laid between Plymouth and Bristol.

The world's first coaxial cable was laid by the Post Office between London and Birmingham, providing 40 channels for telephone traffic.

The London Telecommunications Region and eight provincial regions were set up as a result of the findings of the Bridgeman Committee.

An ultra-short-wave link was established with the Channel Islands.

The first nine-channel short-wave radio link was installed between Belfast and Stranraer in Scotland.

Call queuing, with cyclic distribution, was introduced at larger directory enquiry bureaux.

A limited Anglo-Continental telex service was introduced.

'Country Satellite' exchanges were introduced for remote localities where there were no more than ten subscribers.

Trials were held of two-frequency trunk telephone signalling and dialling.

EMI developed a method of television transmission over screened pair cables and produced equipment which gave successful transmission of 405-line television over 15 miles of cable. This was used for the broadcast of the coronation of George VI in May 1937.

Telephone No. 332 was introduced by the Post Office, an improved design on the revolutionary No. 162 (introduced in 1929) as it was less liable to breakage and provided extra facilities controlled by press buttons.


The 999 emergency telephone service was made available to London subscribers from 30 June and was later extended throughout the country. When 999 was dialled a buzzer sounded in the exchange and a red light flashed to draw an operator's immediate attention.

This was very far removed from the sophisticated information service designed by BT and launched on 6 October 1998. The new information service 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.

A pair of submarine coaxial telephone cables was laid between Great Britain and Holland carrying 16 circuits (a four channel system and a 12-channel system).

The first 12-channel carrier telephone system on special carrier cable was opened between Bristol and Plymouth.

The first standardised 200-line Unit Automatic Exchange (No. 13) was opened.

Glasgow Director Area was inaugurated with the opening of Halfway Exchange.

The London Trunk Director Exchange was opened.

The world's first underground cable for television was laid by the Post Office between Alexandra Palace in North London, Broadcasting House in Portland Place, and other central London locations.


The London to Birmingham coaxial cable was brought into use, initially carrying 40 circuits with wideband working.

A H Reeves, an Englishman (1902-1971), invented Pulse Code Modulation, a revolutionary new system of telephonic transmission.

The first standardised 800-line Unit Automatic Exchange (UAX No. 14) was opened.

The first Administrative Telegraph and Telephone and Radio Conference of the new International Telecommunications Union was held in Cairo.


The outbreak of war on 3 September 1939 heralded six years of hugely increased activity and demand for the Post Office, placing great strain on its resources. An almost immediate effect was the sharp drop in available staff as over 73,000 men and women from the Post Office joined the armed forces within the first few weeks of the war - 15 per cent of the total staff. In some areas the loss was even more keenly felt; 25 per cent of Post Office engineers joined up in 1939, and a substantial percentage of Post Office technical research and telecommunications operating staff were absorbed into signals units of the Forces.

Some preparations prior to September 1939 had already been made when war seemed likely. Additional cables had been laid between important towns over different and alternative routes, particularly vulnerable sites had been by-passed, and old manual telephone exchanges when superseded by automatic exchanges were not dismantled, but held in reserve. In addition, public trunk lines were earmarked for future use of the Services, and these were promptly switched over in September 1939.

During the first six months of the war, before heavy German bombing started, the Post Office made use of the opportunity to complete the link up by telephone and telegraph of Home Defences, particularly Fighter and Anti-Aircraft Commands. By the time of the Battle of Britain, as the Headquarters of Fighter Command, at Bently Priory near Stanmore, Middlesex, was a communications centre in touch with all defence stations and information sources across the country via Post Office facilities. From here the Commander-in-Chief was able to observe the broad 'air picture' and co-ordinate his Fighter Groups. In addition to the vast telephone communications network provided by the Post Office for raid reporting, a complex teleprinter network was also installed. With the collapse of France and when invasion seemed a real possibility, new aerodromes, battery sites, searchlight centres and radar stations had to be set up - and all needed linking with telephone communications, again carried out by Post Office engineers.

Later in the war, as part of the preparations for the Normandy invasion, a new network of cables, switchboards, telephones and teleprinters had to be set up along England's south coast to control the D-Day build up. Once the invasion was under-way, new cross-channel cables were laid and by VE-Day the Post Office had made direct communication possible by telephone or teleprinter to all Allied Forces in North West Europe.

On the home front the Post Office had soon organised itself to meet the demands of the war. ARP services were set up in all departments, and a Home Guard Force of over 50,000 was raised to defend Post Office telegraph and telephone systems in the event of invasion. Other Post Office Defence Forces included medical staff, fire fighters and first aiders, all of whom were particularly called upon during the bombing raids of the early war years. During this time Post Office engineers battled to repair bomb damage to plant and cables, yet were still able to open the additional military channels of communication described above.

The contribution of the Post Office, particularly on the telecommunications side, was significant enough to earn the praise of General Eisenhower, Supreme Commander of Allied Forces in Europe. Although under great strain, the Post Office met the challenges demanded of it, largely through the efforts and sacrifices of its staff. Of the 73,000 men and women who left the Post Office to join up, 3,800 gave their lives. On the Home Front, a further 413 Post Office employees died whilst carrying out their responsibilities.

'Two frequency' inland trunk signalling and dialling was introduced. This beginning of trunk mechanisation allowed operators to dial distant subscribers without the assistance of a second operator.

Teleprinter working was introduced on the Anglo-Continental telegraph cables.

The first mobile Unit Automatic Exchange was put into service.

International telephone services were suspended on 30 August (with a few exceptions) and not restored until 23 June 1945 with the reopening of the service to the USA, Canada, and Kenya.

The Defence Teleprinter Network was opened on the outbreak of war.


The Private Manual Branch Exchange Switchboard (PMBX)1A was introduced.

The London-Birmingham coaxial cable was extended to Manchester.

On 29 December 1940 the CTO was set on fire by burning debris blown in from adjacent buildings in one of the most destructive German air attacks of the Second World War. A reserve telegraph instrument room had been established in the basement of King Edward Building nearby and, in the longer term, telegraph services were maintained by transferring work to the outskirts of London. The interior of the building was completely destroyed. Its damaged upper floors were unsafe and had to be dismantled. The shell of the ground and first floors was refurbished - the ground floor for office accommodation, and the first for instrument rooms. The new telegraph equipment was opened for service in June 1943.


The telephone 12-channel carrier system was standardised.

The Liverpool DirectorArea was inaugurated with the opening of Advance Exchange.

The Telegraph Zone Centre Decentralisation Scheme was inaugurated.


Shared service was introduced on automatic exchanges.

The transfer of the London Toll 'A' lines to automatic working and the opening of the new manual board took place on 14 November.

A VHF radio multi-channel telephone link was converted to frequency modulation for the first time.


Subscriber dialling in London Director Area was extended.

The first submerged repeater was laid between Anglesey and the Isle of Man in a submarine coaxial cable using a rigid housing.

What is generally regarded as the world's first programmable electronic computer (Colossus) was designed and constructed by a Post Office Research Branch team headed by T H Flowers (1905-1998). It was constructed at Dollis Hill where it was first demonstrated on 8 December 1943. It was transported and rebuilt at Bletchley Park near Milton Keynes, the centre of British wartime code breaking operations, in January 1944.

The purpose of Colossus was to decipher German non-Morse encrypted communications - known as "Fish" at Bletchley - which were transmitted at high speeds on a teleprinter machine, called the Lorenz SZ, using the Baudot 32 letter alphabet. The mathematician Bill Tute had broken the German teleprinter codes in 1941, but it was recognised that the decryption process could be largely automated to reduce the time taken to decipher the messages. Flowers was consulted by Max Newman (later Professor of Mathematics at Manchester) who was responsible for the automation process. Flowers had been involved with work at Bletchley since the previous year, when the mathematician Alan Turing and fellow cryptanalysts had sought technical assistance from the Post Office in the breaking of Enigma.

Flowers' great contribution was the recognition that an electronic signal could be used to replicate the code pattern generated by the Lorenz machine, which could then be read by optical sensors in a code breaking device. He proposed using valves instead of the mechanical switching units employed in an earlier device. His proposal was not taken seriously at first, since valves were thought to be too unreliable and fragile, but Flowers knew from his pre-war research into electronic telephone systems that valves were reliable if they were not moved or switched off.

It is now recognised that without the contribution of the code breaking activity, in which Colossus played a major part, the war may have lasted considerably longer. It was in the preparations for D Day that Colossus proved most valuable, since it was able to track in detail communications between Hitler and his field commanders.

By D Day itself a Colossus Mk II had been built. Flowers had been told that it had to be ready by June 1944 or it would not be of any use. He was not told the reason for the deadline, but realising that it was significant he ensured that the new version was ready for 1 June, five days before D-Day. In fact, there were 11 machines by the end of the War, all but one of which were destroyed on Churchill's orders, the last being moved to GCHQ at Cheltenham where it apparently remained in use until at least 1958 and possibly into the 1960s. A working replica of Colossus has been constructed in recent years and housed at Bletchley Park.

The original Colossus consisted of 1,500 valves (the Mark II used 2,400 valves) and was the size of a small room, weighing around a ton. Described by Flowers as a "string and sealing wax affair", it nevertheless could do in hours what otherwise could have taken weeks, being able to process 5,000 characters a second to run through the many millions of possible settings for the code wheels on the German enciphered teleprinter system. Designed as a code breaking machine, and without an effective memory or a stored program, it was not quite what is regarded as a computer today. Nevertheless, it predated other contenders for the title of the first modern working computer, and was the forerunner of later digital computers.

In March the long wave building ("C" Building) at Rugby Radio Station was severely damaged by fire. A newly built counterpart to GBR was able to take traffic within a few days. The damage to the building and GBR was repaired within six months.


The Imperial Communications Advisory Committee, constituted in 1929, was renamed the Commonwealth Communications Council. It became the Commonwealth Telecommunications Board in 1949.


The inland teleprinter manual switching was introduced.


Arthur C Clarke, an English expert on space research and later to become renowned for his science fiction classic '2001: A Space Odyssey', suggested in 'Wireless World' the use of synchronous satellites for communications, the first occasion such a concept was proposed.

A direct Anglo-German polythene coaxial submarine cable was laid.

The CS Alert (No. 2) was sunk with all hands in February off the North Goodwins, probably by a submarine. In April the CS Monarch (No. 3) was sunk by a mine off Orford Ness, Suffolk.

The German cableship 'Nordeney' was given to the Post Office as a replacement for war losses and was renamed the Alert, the third of that name. She was scrapped in 1960.

Some continental telephone and telegraph and transatlantic telephone services were reopened. The basic rate for a London-New York call was £3 for three minutes' conversation.


Continental and overseas telephone services continued to be gradually reopened.

A submerged repeater was inserted into the Anglo-German cable.

Cabinets and pillars were introduced for subscribers' local cable schemes.

CS Monarch (No. 4) was built - at the time the largest cable laying and repair vessel in the world, capable of remaining at sea for more than three months without refuelling or entering port. Her most notable achievement was the laying of the first Transatlantic Telephone Cable (TAT 1) in 1956. She remained in service for 24 years and was sold to Cable & Wireless in 1970, thereafter sailing under the name 'Sentinel'.

The Post Office Central Training School was moved from Dollis Hill in North London to a site near Stone, Staffordshire.


An Anglo-Dutch polythene coaxial cable was laid.

Cable & Wireless Ltd. was nationalised on 1 January by the Treasury's purchase of the company's shares, and by the Post Office's acquisition of the company's telecommunications assets in Britain (with the exception of its telegraph cables and terminal station at Porthcurno), including the return of the wireless stations previously leased to the company in 1929.

From that date Cable & Wireless operated no telecommunications services in the UK until 1982, and conducted its overseas business as an independent entity entirely separate from the Post Office. In many ways, nationalisation did not dramatically affect the way the company operated. Successive Governments left it largely to its own devices, though with strict limits on its ability to spend and expand. Government control of its day-to-day affairs was limited to Treasury oversight of its investment plans and the appointment from time to time of Post Official officials to the company's board of directors. From 1974 the company was allowed rather more commercial freedom, so long as it agreed to consult with the Government over any major programmes which might be politically or financially sensitive.

With the election of a new Conservative Government in 1979, committed to the withdrawal of state intervention in industry and the free market philosophy, a new approach was inevitable. In July 1980 Sir Keith Joseph, Secretary of State for Industry, outlined plans for privatising Cable & Wireless in his policy statement which announced the Government's plans for restructuring the Post Office and liberalising the telecommunications market. In November 1981, following the passing of the British Telecommunications Act which created British Telecom as a public corporation separate from the Post Office, Cable & Wireless was privatised with the sale of 50 per cent of its shares. There were further sales of Government shares in November 1983 and December 1985.

In 1981, Cable & Wireless was a member of the consortium which set up Mercury Communications Ltd., which was to be British Telecom's only competitor in the UK until the ending of the so-called "duopoly" in the provision of telecommunications services in 1991. Mercury subsequently became involved in setting Cable & Wireless Communications with Nynex, Bellcable Media and Videotron.


The Bell Telephone Laboratories, USA, announced the invention of the transistor.

The International Teleprinter Alphabet No. 2 was adopted for the inland telegraph service.

A shared service was made obligatory for all new residential applicants and for removing residence subscribers.

Telephone service was opened with China.

The phototelegraph service with Europe was re-introduced for the first time since the beginning of the war.


The radio-telephone service with ships in the Thames Estuary was introduced.

The Tercentenary Scheme for the provision of telephone kiosks was abolished. The Rural Allocation Scheme was introduced: kiosks were allocated to rural areas and installed where recommended by a rural local authority, whether likely to prove profitable or not.

A London-Birmingham television radio relay link was opened using large tube coaxial television cables.

Phonogram automatic distribution equipment was installed at Newcastle-Upon-Tyne.

The Commonwealth Communications Council, founded in 1929, was reconstituted as the Commonwealth Telecommunications Board with essentially the same terms of reference.


A long-distance television cable was brought into service between London and Sutton Coldfield, the first of its kind.

The Edinburgh Director Area was inaugurated with the opening of Central and Fountainbridge Exchanges.

The control of the overseas services of Cable & Wireless Ltd from the United Kingdom was transferred to the Post Office. At the same time, the radio beam stations leased to Cable & Wireless were returned to the Post Office.

Field trials of the pressurisation of trunk and junction cables radiating from Leatherhead were held.

The success of the Strowger system to meet network demands - largely as a result of the arrangements under the Telephone Exchange Equipment Bulk Supply Agreement (signed in 1923) and the British Telephone Technical Development Committee (set up in 1933) - led to an important decision. There had been rapid advances in electronic techniques during and immediately following the Second World War which led the Post Office and their exchange equipment manufacturers to believe that electronic exchanges could be developed within a short space of time without pursuing alternative electro-mechanical systems. As a result, the decision was now taken to work towards a progressive change of the network from mechanical Strowger systems to electronic systems. This policy was jointly adopted and led in due course to a Joint Electronic Research Agreement (JERA) and the formation of the Joint Electronic Research Committee (JERC) in 1956. These initiatives were put in place to examine various possible solutions for electronic exchanges, and to avoid unnecessary duplication of research and development by sharing such work amongst the five manufacturers party to the Bulk Supply Agreement with the Post Office.

The hope was that the intermediate step of the introduction of register controlled crossbar systems, apparent in other telecommunications administrations elsewhere, would not be necessary under this policy. In the event, development of electronic systems proved more difficult than originally thought, and by 1957 the Automatic Telephone and Electric Company realised that to maintain their position in the export market they needed a viable crossbar system to market. As a result the company developed in time the 5005 Crossbar System. Original development of electronic systems was based on time-division- multiplex techniques and a prototype TDM exchange was built and installed in the Post Office Research Station at Dollis Hill. Parties to JERC co-operated in designing and building a large electronic exchange of the same type which was put into service by the Post Office at Highgate Wood in 1963. The experience of Highgate Wood showed that TDM techniques were uneconomic and difficult to achieve with the technology and components then available. The parallel space division approach, using reed relays for switching, proved more promising and development was concentrated in this area, leading eventually to the successful TXE2 and later the TXE4 systems.

Four submerged repeaters were fitted in tandem to a cross-channel cable.

The first phase of the Teleprinter Automatic Switching Scheme was introduced.

An Anglo-Danish submarine coaxial cable was laid.

Private Automatic Branch Exchanges Nos. 1 and 2 were introduced.


A Telephone Act became law in August which enabled the Postmaster-General to set rental charges and so forth by statutory regulation. The passing of the Act was the first recognition in law of the telephone as a separate instrument from the telegraph. It was also the first Telephone Act passed by Parliament, 75 years after the invention of the telephone.

Until this time the Postmaster-General conducted the telephone service under powers conferred by a number of Telegraph Acts, because of the court decision in 1880 that a telephone was a form of telegraph under the telegraph acts then in force.

The objective of the legislation was to simplify the provision of a telephone service by replacing the existing system of individual contracts between customers and the Postmaster-General for providing apparatus and equipment with a system of Statutory Regulations.

Post Office engineers evolved an entirely new type of deep sea telephone cable. Known as the lightweight submarine cable it had a steel strand in the centre instead of the conventional layer of steel armour wires on the outside. This lightweight type of cable was both cheaper and easier to lay.

A television coaxial cable was brought into use between Birmingham and Manchester.

The Swiss made "Ipsophone", a record / answer machine, became the first such device to be available in the UK. As an "approved attachment" they were not supplied by the Post Office, but by the Ansafone Company. The Post Office did not market its own machine until 1958.


The Post Office External Telecommunication Executive was formed to control the overseas services transferred from Cable & Wireless. This department later became the International Division in 1979, and British Telecom International (BTI) in 1981. BTI operated until the Project Sovereign re-organisation in 1991, when its functions were split between various new divisions.

A new telex network was opened for Government departments only.


Agreements were signed on 1 December between the British Post Office, the American Telephone & Telegraph Company, the Canadian Overseas Telecommunications Corporation and the Eastern Telephone & Telegraph Company for the provision of a transatlantic telephone cable.

Pressurisation of trunk and junction cables was introduced.


A new Directory Enquiry Service - which included the use of the London Postal Area printed street directory - came into operation in January.

A new public inland telex service was established using a separate network integrated with international telex circuits.

An Anglo-Norwegian submarine telephone cable was laid between Aberdeen and Bergen. At the time it was the longest submarine cable in the world at a length of 300 nautical miles and was laid by the Post Office cableship HMTS 'Monarch' (No. 4).

The Teleprinter Automatic Switching Scheme was introduced.

A step was taken towards full automatic working with the gradual introduction of through-operator dialling, which permitted an originating controlling operator to set up calls automatically over two or more links to a terminating automatic exchange through switching equipment at zone centre exchanges. This stage began with the opening in 1954-1955 of two large automatic trunk exchanges, followed by similar exchanges in other important centres.


The first cordless switchboard was opened at Thanet Exchange.

The last Post Office inland morse telegraph circuit was recovered from between Barra and South Uist in the Outer Hebrides.


The first transatlantic telephone cable was laid between Oban in Scotland and Clarenville in Newfoundland, a distance of 2,240 miles. After crossing Newfoundland, a further submarine cable was used to complete the connection to the mainland of North America, some of the circuits terminating in Canada and some in the USA. The Post Office cableship HMTS 'Monarch' (No. 4) participated in the lay. The cable entered service on 25 September at 6pm. It was withdrawn in 1978.

The Weather Forecast Service and the Test Match Information Service were introduced.

The Joint Electronic Research Committee (JERC) was formed to co- ordinate research and development on electronic charges.


The Road Weather Information Service was introduced.

The free call allowance for residential subscribers was abolished.


The Subscriber Trunk Dialling (STD) service, whereby telephone callers are able to make trunk calls automatically without the aid of the operator, was introduced into the United Kingdom by the Queen dialling a call on 5 December from Bristol Central Telephone Exchange to the Lord Provost of Edinburgh, over 300 miles away - the greatest distance over which a subscriber trunk call could be made at the time. Afterwards, the Queen operated a switch which put 18,000 telephones connected to Bristol Central onto the new system.

Before STD, Bristol subscribers could dial direct to 2,600 stations connected to 41 local exchanges outside the city. Afterwards they could dial calls to 427 exchanges, including most of those in London, Birmingham, Manchester and Edinburgh. Before STD could be introduced, however, telephone charges, designed for manual operation, had to be simplified. Only then could full automation follow. The introduction of Group Charging Areas reduced as well as simplified the cost of most trunk calls. For instance, the call made by the Queen to Edinburgh lasted 2 minutes 5 seconds and cost 10d (4p); under the old charging system the call would have cost 3s 9d (19p).

The first automatic telex exchanges were opened at Shoreditch in London and at Leeds.

The Teletourist Information Service was introduced in London; in English (24 hours) and in French and German (7 pm-11 pm).

Nineteen countries established the European Conference of Postal and Telecommunications Administration (CEPT), expanding to 26 during its first 10 years. Another 17 countries from Eastern European joined these in 1992 so that CEPT henceforward covered almost the whole of Europe.

Original members were the former monopoly holding telecommunications administrations which handled operational and regulatory functions. Up until the early eighties the CEPT dealt mainly with administrative, technical and operational tasks, but sovereign and regulatory functions gradually grew in importance. From September 1992 the CEPT was a body of the newly established National Regulatory Authorities (NRAs), and dealt exclusively with sovereign / regulatory matters. Operators established their own organisation called ETNO (European public Telecommunications Network Operators' association), based in Brussels, to deal with technical and operational tasks previously covered by CEPT.

The Post Office introduced Answering Machine No. 1; an answer only machine which gave out a 20 second message, played twice to ensure callers from payphones received the whole message. A second model,

Answering Machine No. 2, followed in 1963.


The 700 series of telephone designs was introduced by the Post Office. It was much lighter than previous designs with lightweight components and a new easily cleaned plastic material, available in a range of six attractive colours, marking the demise of black as the standard telephone colour. The familiar 'curly cord' connecting the handset to the telephone now also made its first appearance. The 700 series was designed for the Post Office by W.J. Avery of Ericsson, but owed a distinct debt to the Bell 500.

The Postmaster-General, Ernest Marples, announced the new Friendly Telephone policy at a press conference in the House of Commons on 11 March. The new policy was result of a report entitled, Telephone Service and the Customer on a visit by a Post Office team the previous November to study the telephone system in the United States.

Anticipating the greater role that would be played by automation in the system, the policy was intended to ensure that customers received a friendly service when personal contact was made. A striking feature of the policy was that "subscribers" were henceforward to be known as "customers", and that operators in particular were to be released from the strict rules which governed what phrases they were allowed to use when speaking to customers. It was noted at the time that for the previous 54 years operators had not been allowed to say "Good Morning" when taking a call, only such formal phrases as "Number, please".

As part of the policy, social surveys were conducted to discover what customers wanted, and an organisation set up to develop facilities to meet their need as far as possible.

The policy was promoted within the Post Office with signed copies of booklets outlining the new approach being sent to everyone in the telephone service. The booklet stated, "The aim and purpose of the telephone service is not only to serve, but to please the customer. Everything must be subordinated and surrendered to that aim. Our telephone service must be a personal service to meet the customers' wishes. We must study their wishes all the time; we must then satisfy them by a service which is courteous, pleasing and speedy."

The Postmaster-General tape-recorded a personal message to all operators, to which they could listen by ringing a special number. In the Areas, Telephone Managers held local press conferences, and posters were put up in exchanges.

In its objectives and its customer focus, there are remarkable similarities with BT's Putting Customers First programme which followed over 40 years later.

The first versions of Pay-On-Answer coinboxes on public payphones were introduced and began to supersede the Button A and B models . They were necessary following the introduction of STD in major towns because the A and B boxes could not be modified to cope with automatically connected trunk calls. Public demand had been for a coinbox slot that would accept the 3d piece, but after only seven years the box was modified to accept 6d (2 1/2p) and 1s (5p) coins only. The introduction of decimal coinage in 1971 made another modification necessary. Thereafter, there was only one further modification before Pay-On-Answer payphones were phased out. Plans were made in 1978 to update the entire payphone system by exploiting the advantages of electronic technology. It was decided that the new system would be based on the pre-payment approach with a refund of unused coins where appropriate. Modernisation began in 1985 when BT embarked on a £160 million programme to replace red phoneboxes and Pay-On-Answer mechanisms with the newly introduced blue payphone in new housings, the KX 100 - 400 family of anodised aluminium and stainless steel booths.

New dialling codes, preliminary to the start of subscriber trunk dialling in London, were introduced in the London Director Area on 6 April.

"0 for Operator", which had been introduced to London in 1928 when the first automatic director exchange was opened in London, TRU for Trunks and TOL for Toll were replaced by 100.

The second transatlantic telephone cable (TAT 2) was laid by the Post Office cableship HMTS Monarch (No. 4) between Penmarch, France and Sydney Mines, Nova Scotia, Canada via Terrenceville, Newfoundland, Canada.

TAT 2 was taken out of service in 1982 after 23 years of service.

A car radiophone service for vehicle users was introduced in South Lancashire on 28 October.

The Freephone service was made available to subscribers in any part of the country.


The conversion of the Inland Telex Service to automatic working was completed.

A credit card service for inland and overseas telephone calls was introduced on 1 March (see also 1988 entry).

The CS 'Alert' (No. 4) was launched on 8 November.

The new engaged tone was introduced at Bristol to conform to international standards.

The first London STD exchange (Watford) was opened.

The cable pressurisation scheme was extended to include local cables from exchanges to cross-connection cabinets.

The first direct cable link between the United Kingdom and Sweden was laid.

Telephone No. 706 was introduced.

The Post Office introduced a "Freephone" service for business users, a forerunner of the BT Freefone and Lo-call services.


The Anglo-Canadian cable (CANTAT 1) was laid by the Post Office cableship HMTS 'Monarch' (No. 4) between White Bay, Newfoundland, Canada and Oban, Scotland, as the first section of the submarine telephone cable network linking the Commonwealth. This was the first time that the lightweight submarine cable, developed by the Post Office in 1951, was used in service.

CANTAT 1 was taken out of service in 1982 after 23 years of service.

The first STD exchanges in the City of London (Metropolitan, London Wall, Moorgate) and Central London (Victoria, Tate Gallery, Abbey) were opened.

A recipe telephone information service was opened in Birmingham.

A radio telephone service from aircraft was introduced.


The Post Office Satellite Communications Station at Goonhilly Downs in Cornwall began working. The station was designed to track communication satellites and through them to transmit and receive telephone, telegraph and television signals. The station used a British-designed dish-type aerial which was the first of its type.

Dish-type aerials were later adopted throughout the world for satellite communications. The station took part in the first transatlantic television transmission made via an artificial satellite - Telstar. The first broadband active communications satellite, Telstar was launched into orbit from Cape Canaveral on 10 July. It circled the earth once every 158 minutes at a height of between 600 and 3,500 miles. The day after it was launched, Telstar was used to transmit the first high-definition television pictures across the Atlantic.

The first telephone cable from the United Kingdom to the Faroe Islands and Iceland was opened (SCOTICE).

The first experimental PAM/TDM electronic exchange was opened at Highgate Wood, London, in December.

Kiosk No. 7 - (the K7) - was put on trial in January in London. A design in aluminium by the architect Neville Comber, it met with initial approval from members of the public, but failed to withstand the rigours of British weather. Only five aluminium examples entered service, four in London and one in Coventry. A further half dozen were commissioned in cast iron, but it is not known where they were erected, if anywhere. The aluminium prototypes continued in service for the next twenty years.


International Subscriber Trunk Dialling (ISD) was introduced on 8 March, allowing London subscribers to dial Paris numbers.

The Commonwealth trans-Pacific cable (COMPAC) was laid between Canada and Australia. The PO cableship HMTS 'Monarch' (No. 4) participated in the lay.

The third transatlantic telephone cable (TAT 3) was opened between Tuckerton, New Jersey, United States and Widemouth Bay, Britain. It was taken out of service in 1986 after 23 years of service.

Operator dialling on telephone circuits between Britain and the United States was introduced.

New clocks using a revolving magnetic drum replaced the original speaking clock introduced in 1936. The 79 separate phrases required for a 12-hour clock were recorded as circular tracks spaced 1/16 inch apart along the length of the drum. The pips were not recorded on the drum but were derived from an oscillator. The Speaking Clock had accuracy to approximately 1/20 second. Like the first clock, the second speaking clock had its accuracy calibrated and corrected by referencing to a time signal from the Royal Greenwich Observatory, broadcast by Rugby Radio Station.

A competition to find a replacement for Miss Jane Cain's voice  for the Speaking Clock was won by Miss Pat Simmons, a supervisor in a London telephone exchange. She was to be heard until Mr Brian Cobby replaced her.

The new cordless international telex switchboard was opened at Fleet Exchange, London.

The Post Office introduced Answering Machine No 2. Like its predecessor it was an answer only model, but with a longer message facility (of up to three minutes), this second version was more suited for use on information lines. Its first use was in Birmingham, for a "Dial-a-Prayer" service. The first Post Office / British Telecom supplied answering / recording machine was not nationally available until 1981.


Datel services were introduced, enabling data to be transmitted over private telegraph circuits and the telex network. The following year, Datel service were extended to enable data to be sent over private telephone circuits and the public telephone network. Datel services subsequently became available to a number of European countries and the United States.

The first automatic crossbar exchange (TXK1) in the United Kingdom was opened at Broughton in Lancashire.

The first Small Automatic Exchange (SAX) was opened at Bury in the Brighton Telephone Area.

Trial Pulse Code Modulation (PCM) systems were introduced on junction cables.

The Post Office was a founder member of INTELSAT; the International Telecommunications Satellite Organisation founded to develop a global commercial satellite communications system.

Originally having a membership of eleven, there were over 100 member countries in 1999, the UK being the second largest shareholder. BT was the UK representative on INTELSAT. On the technical side, BT contributed substantially to studies on the characteristics and utilisation of successive generations of INTELSAT satellites.


INTELSAT 1 (Early Bird) the first commercial communications satellite, was launched into a synchronous orbit of 22,300 miles on 6 April.

Prime Minister Harold Wilson MP opened the BT Tower (then known as the Post Office Tower) on Friday 8 October in London, Britain's highest building at the time at 620 feet (189 metres), including a 40 ft (12 metre) lattice aerial on top. It was designed to carry aerials for the Post Office microwave network covering some 130 stations throughout the country, including the Post Office satellite earth station at Goonhilly.

The Tower - the focal point for this network - and the four-storey building below are equipped to handle 150,000 simultaneous telephone connections and to provide 40 channels for black and white or colour television. It was partly to meet the growing demands of broadcasting that the Tower was opened, enabling the use of microwaves instead of landlines.

Postmaster-General Anthony Wedgwood Benn, opened the Tower to the public on 19 May the following year, accompanied by Sir Billy Butlin who had taken the lease on the revolving restaurant on the 34th floor.

Begun in 1961, the Tower cost £9 million to build, and weighs 13,000 tons, including 95 tons of high tensile steel in the base and 695 tons of mild steel in the structure. It was designed to sway not more than 20 centimetres (almost 8 inches) each way in winds up to 100 mph. There are 4,500 square metres (50,000) square feet) of glass on the outside, set in stainless steel window frames.

The Tower Suite conference area, 158 metres (520 feet) above ground, revolves two and a half times each hour. Nylon tyred wheels running on inner and outer circular rails support the rotating structure which weighs 30 tons.

During the first year the Tower was open to the public - from 19 May 1966 to 19 May 1967 - it was visited by nearly 1 million visitors, 105,000 of whom dined in the revolving restaurant. They were transported by the Tower's two lifts, which are among the fastest in Europe, travelling at 6 metres per second. During that first year the lifts between them travelled nearly 70,000 kilometres. The fare for everyone, whether dining or not, was 4 shillings (20p) and half price for children.

The country was shocked when a bomb placed by a terrorist bomber on the 31st floor of the Tower exploded at 4.30am on 31 October 1971. A warning had been phoned to Purley exchange at 9pm the previous evening, but despite a search nothing had been found, and the call had been thought to be a hoax. The result of the bombing was a tightening of security that left the Tower largely closed to the public on a permanent basis. The total number of visitors to the Tower up until that time had been 4,632,822, making it one of London's most popular tourist attractions. The restaurant remained in operation until 1980 when its lease expired, when it was also closed to the public except for hospitality events or charity fund-raising functions, such as Comic Relief.

Trial installations of electronic equipment for telephone exchanges with a capacity for up to 200 telephone lines were brought into service at Leamington Spa on 25 March and Peterborough on 10 June. Leamington Spa was a GEC "RS31" design, Peterborough was an Ericsson Telephones Ltd. "Pentex" design. Both were forerunners of the Post Office TXE2.

The public radiophone service for vehicle users in South Lancashire  was extended to the London area.

Datel services were extended.

The TAT 4 transatlantic telephone cable was laid between Tuckerton, New Jersey and St. Hilaire-de-Riez, France. It was retired in 1987 after 22 years of service.

The first Internet was begun by Bolt, Beranek & Newman (BBN). Called the ARPANET, it was a network connecting the University of California at Los Angeles (UCLA), SRI in Stanford, USA, University of California at Santa Barbara and the University of Utah, using 50Kbps circuits. It was completed to its original specification in 1969.

In 1984 ARPANET was divided into two networks, one to serve the military (MILNET) and the other to support academic research (ARPANET). The US Department of Defense continued to support both networks.
In 1992 the Internet Society was chartered, triggering the World Wide Web phenomenon.


All Figure Numbering (AFN) was introduced - starting in the Director Areas (London, Birmingham, Edinburgh, Glasgow, Liverpool and Manchester). AFN had become essential with the development of direct international dialling as the mixed letter and number combinations were insufficient to meet the needs of expanding service.

Telephone No. 712 - later No 722 - (the 'Trimphone') was made generally available.

This innovative design by STC, half the weight of the more traditional 700-type telephone, originated in 1961 when the Post Office decided it needed a luxury telephone to add to its range. Towards the end of 1963 the Post Office settled on the design by STC, and in 1964 placed a contract for 10,000 units. The first example of the Trimphone was presented in May 1965 by the Postmaster-General, Anthony Wedgwood Benn, to a newly wed couple in Hampstead in a ceremony marking the installation of the ten millionth telephone to be installed in Britain. The new design was trialled in the London North West Telephone Area in the same year, before becoming available throughout the country in 1966 in three two tone colour combinations. By 1980 there were 1.6 million in operation out of a total telephone population at that time of 27 million.

The Trimphone was an entirely new and lightweight design, which among its novel features incorporated the receiver and microphone in the earpiece as a composite unit. The user spoke into the handset in the normal manner, but the sound was carried up inside the handset to the microphone. Because the handset was hollow, as opposed to the solid mouldings of earlier phones, this was the first telephone with the feature of which most modern phone users are now wary. If the user attempted to place a hand over the microphone in order to make a confidential aside, the sound was still transmitted inside the handset with embarrassing results.

Another feature was a tone call device in place of the conventional bell, which had a volume control to suit the preference of the subscriber. A transistorised oscillator connected to a miniature loudspeaker produced the warbling tone.

However, possibly the most striking out of many new features was the luminescent dial, which glowed green in the dark. This effect came from a small glass tube of tritium gas, which gave off beta radiation and made the dial fluoresce. Although the radioactivity was equivalent only to that given off by a wristwatch, with people less likely to have as close or continuous contact as a timepiece, it was later felt wise to withdraw this facility as public concern over radioactivity grew. By 1981, towards the end of the general availability of the Trimphone, a keypad version was marketed. BT later invested in a widely publicised initiative to safely recover and dispose of Trimphones from customers' premises.

The first fully operational production electronic telephone exchange in Europe (the first small-to-medium sized one in the world) was opened at Ambergate, Derbyshire. This was a TXE2 reed relay exchange.

The TXE2 was a result of research into space division electronic exchanges  and its introduction was part of the major programme of investment into the network by the Post Office using modern switching equipment which began around this time. Initially, the TXE2 was used for exchanges with a capacity of up to around 2,000 lines. The Plessey 5005 (TXK1) crossbar exchange, also produced under agreement by GEC, was used for larger installations in non-director areas and group switching centre exchanges. The BXB (TXK3) crossbar exchange, a derivative of the ITT Pentaconta crossbar system developed in France, was made by STC for larger installations in director area and trunk-transit exchanges.

The TXE4 electronic exchange, a development complementing the TXE2, was introduced from 1976 to take over from crossbar the provision of large exchanges.

During the 1980s and 1990s the TXE and TXK families of electronic and electromechanical exchanges were gradually replaced with System X and System Y digital exchanges in a £20 billion investment programme. The last TXE2 exchanges (Ballycastle, Northern Ireland, Llandovery, Wales and Ramsbury, England) were closed on 23 June 1995. The last TXK crossbar exchange, at Droitwich, was withdrawn in 1994.

The UK network became totally digital on 11 March 1998 with the closure of the last electronic TXE4 exchanges at Leigh-on-Sea and Selby and their conversion to System Y (AXE 10) and System X respectively.

The first Dial-a-Disc service was opened in Leeds.


The final section of SEACOM (the South East Asia Commonwealth cable) was opened, linking Australia, Hong Kong and Singapore.

The first London Pulse Code Modulation (PCM) cable route was opened between Sunbury-on-Thames and Faraday Exchange, London on 27 November. PCM allowed up to 24 telephone conversations to be carried over two wires.

A prototype Confravision studio was opened in London.

The Overseas Telegraph Services new automatic relay centre was opened.

'Lincompex', a new type of radio telephony terminal equipment, was introduced on several overseas routes.


The Post Office installed the world's first PCM (Pulse Code Modulation) exchange at the Empress telephone exchange near Earl's Court in London. Postmaster-General John Stonehouse opened the exchange on 11 September with an inaugural call to the Mayor of Hammersmith.

The possibilities of PCM systems for the transmission of speech had been originally developed more than 30 years earlier in 1937 by A H Reeves working in Paris for the Western Electric Company, and PCM was first patented by him in France the following year. He proposed a transmission system in which voice signals were electronically coded into strings of digital pulses, transmitted in this form, and then turned back into speech at the receiving end. His ideas were well in advance of his time, but the technique could not be economically realised until suitable components, particularly transistors, were available.

Technical advances in the early 1960s enabled the possibility for the first time of PCM providing an economic solution to the problem of providing multi-channel systems designed for speech networks. Conventional analogue transmission allowed two pairs of wires to carry two conversations at one time. PCM transmission increased this to 24 simultaneous conversations by interleaving the groups of pulses corresponding to different callers (Time Division Multiplexing), reducing the need for many new cables. PCM transmission also allowed a greater diversity of telecommunications services in addition to telephony, including facsimile and data transmission.

The particular significance of Empress was that it was the first of its type in the world to switch PCM signals from one group of lines to another in digital form. PCM transmission had been introduced the previous year on selected routes, but switching on non-direct routes was done by conventional electromechanical means. This meant that digitally transmitted calls had to be converted to analogue for switching, then converted back to digital form for transmission over the next PCM route. The Empress Exchange was the result of Post Office research into overcoming this inefficient and expensive problem. Empress also demonstrated that an integrated PCM transmission and switching system was capable of working fully within the existing network of electro-mechanical (Strowger and Crossbar) systems. This first use of computer-like technology with micro-electronic circuits was part of the investment programme of the time and led directly to the System X family of digital switching systems and the totally digital service and integrated digital network which BT now operates.

Kiosk No. 8  - (the K8) - was introduced in July. Two designers, Douglas Scott and Bruce Martin, had been commissioned in 1965 to produce designs for a new kiosk. The designs had to incorporate the best features of previous designs and be suitable for both urban and rural surroundings. Bruce Martin's design was eventually selected and when introduced had been produced in just over one year, the shortest time then taken to create a new kiosk. It was made from cast iron and contained full length toughened glass, and became the successor to Kiosk No. 6  -(the K6) - for all replacements and new installations as the standard payphone housing.

The first all-transistor 12 MHz (2,700 circuits) coaxial cable was brought into use.


The General Post Office ceased to be a Government Department on 1 October and was established as a public corporation under the Post Office Act of this year.

The idea of converting the Post Office into a nationalised industry had first been raised as early as 1932 when a publication by Lord Wolmer entitled 'Post Office Reform' made references to the subject. There was at the time widespread criticism of the existing organisation of the Post Office and one proposed improvement was that the Post Office, as a large commercial undertaking, should be run along the lines of a business concern rather than an ordinary government department. A committee under the chairmanship of Lord Bridgeman was set up, also in 1932, to investigate these criticisms.

In the event it was not until 1965, following a Labour victory in the parliamentary election of the previous year, that Postmaster-General Anthony Wedgewood-Benn put into motion the process that finally culminated in the creation of the Post Office as a public corporation. After much study and deliberation the Post Office Act, 1969, was passed and this laid down the structure of the new organisation, the Corporation being split into two divisions - Posts and Telecommunications - which thus became distinct businesses for the first time. Under the Act, the Post Office had the exclusive privilege of running telecommunications systems with limited powers to authorise others to run such systems.

A second aerial at the Post Office Satellite Communications Station, Goonhilly Downs, was completed. The station could now communicate simultaneously with satellites over the Atlantic and Indian Oceans. In July, Goonhilly was the European terminal for the television coverage of Man's first steps on the moon at the time of the Apollo 11 moon landing.

The first standard cordless switchboard was opened at Croydon following trials at Thanet (1956), Middlesbrough (1959) and Stafford (1961).

The Financial Times Industrial Ordinary Share Index was introduced on the Telephone Information Service.

INTELSAT communications satellites were launched and stationed over the Pacific and Indian Oceans.

The first cable television installation in the UK was introduced, in Washington New Town, Tyne and Wear.


The world's first phone books produced by a fully integrated computer printing process were completed for the Post Office in January.

The International Subscriber Trunk Dialling service was extended to allow London subscribers to dial New York numbers - the world's first major Inter-Continental subscriber dialling service. The cost was 10s per minute.

The 100th electronic telephone exchange (TXE2) was opened at Bawtry near Doncaster, Yorks.

The first TXK1 electromechanical crossbar exchange (Plessey 5005 system) in London was opened at Upminster, Essex on 3 December. This replaced London Telecommunications Region's last manual exchange.

The first modern common control PABX was opened for the National Omnibus Company.

Tape Callmaker, a repertory dialler device, was brought into service.

The first public demonstration of a waveguide digital transmission system was held.

The first of the modern four-wire gateway international exchanges in Britain was opened at Wood Street in London using Plessey 5005 crossbar equipment. The rapid growth in international traffic necessitated other centres being opened, resulting in the opening of Mondial House in London.

Telephone No. 746 was introduced, a modern instrument using coloured plastics together with lightweight components and incorporating a balanced armature receiver.

A Business News Summary telephone information service was introduced.

The TAT 5 transatlantic telephone cable was laid between Green Hill, Rhode Island, USA and St. Hilaire-de-Riez, France. It was retired in 1993 after 23 years of service.


Transatlantic dialling was extended. Six British cities (Birmingham, Edinburgh, Glasgow, Liverpool, London and Manchester) were able to dial direct to the whole of the mainland of the USA by dialling 0101 followed by the USA area code and local number.

Confravision, the world's first public bothway television system giving conference facilities to groups of people in different cities, was made available by the Post Office at its studios in Birmingham, Bristol, Glasgow, London and Manchester.

In July the Post Office announced the development of the 1+1 subscribers carrier system by means of which two subscribers could speak simultaneously on one line.

The last Director exchange converted to STD (Ilford Central).

The first TXK2 exchange was opened at Nutfield Ridge, Surrey.

The first TXK3 exchange was opened at North Cheam, Surrey. The first production TXK3 exchange was opened at Liberton, Edinburgh.

The introduction of decimal coinage resulted in a fundamental change in the design of the payphone coinbox mechanism. Built to take up to three different duodecimal coins in the value ratio 1:2:4 it now had to be modified to a 1:2:5 value ratio.

The Viewdata (Prestel) idea was conceived by Sam Fedida at the Post Office Research Laboratories at Dollis Hill, London.

The Dataplex 1 service (FDM) was introduced.

The first direct submarine cable link was laid between the UK and Spain.

Gardening and Bedtime Story Services were introduced as an addition to the range of recorded information services provided by Post Office Telecommunications.

Transit Network opened with the connection of Kingsbridge, Wolverhampton and Worcester.


The world's first phone books produced by a fully integrated computer printing process were completed for the Post Office in January.

The International Subscriber Trunk Dialling service was extended to allow London subscribers to dial New York numbers - the world's first major Inter-Continental subscriber dialling service. The cost was 10s per minute.

The 100th electronic telephone exchange (TXE2) was opened at Bawtry near Doncaster, Yorks.

The first TXK1 electromechanical crossbar exchange (Plessey 5005 system) in London was opened at Upminster, Essex on 3 December. This replaced London Telecommunications Region's last manual exchange.

The first modern common control PABX was opened for the National Omnibus Company.

Tape Callmaker, a repertory dialler device, was brought into service.

The first public demonstration of a waveguide digital transmission system was held.

The first of the modern four-wire gateway international exchanges in Britain was opened at Wood Street in London using Plessey 5005 crossbar equipment. The rapid growth in international traffic necessitated other centres being opened, resulting in the opening of Mondial House in London.

Telephone No. 746 was introduced, a modern instrument using coloured plastics together with lightweight components and incorporating a balanced armature receiver.

A Business News Summary telephone information service was introduced.

The TAT 5 transatlantic telephone cable was laid between Green Hill, Rhode Island, USA and St. Hilaire-de-Riez, France. It was retired in 1993 after 23 years of service.

A third aerial was completed at the Post Office Satellite Communications Station at Goonhilly Downs, making the station the largest in Europe and the first in the world to operate simultaneous commercial services through three satellites.

The ten millionth telephone exchange line was installed in the United Kingdom.

The Keyphone was market trialled in nine areas of the country. Some 3,000 instruments were involved in the trial.

The first e-mail program was developed by Bolt, Beranek & Newman.


The world's first experimental international Confravision (video conference) link was set up by the Post Office between London and Sydney, Australia.

The Post Office telecommunications monopoly in the Channel Islands ended on 1 January with the transfer of responsibility for running such services to the States of Guernsey (covering Guernsey, Alderney, Sark, Herm and Brechou) and Jersey.

The Post Office adapted the hovercraft principle to move pre-packed containers of submarine cable weighing up to 70 tons at its new Southampton cableship depot.

The first mobile electronic exchange was brought into service.

The last London Telecommunications Region exchange to be converted went STD at Nazeing, Essex.

The last Siemens 16 exchange was withdrawn from service on 17 January at Portslade, Sussex.


The world's first commercial International Confravision service was opened between the United Kingdom and Sweden.

International Subscriber Trunk Dialling (ISD) was extended to additional countries including New Zealand and Australia on 1 December, making UK subscribers the first in the world able to dial the Antipodes directly.

A new transatlantic telephone cable (CANTAT 2) was completed between Widemouth, Britain and Halifax, Novia Scotia, Canada.


Two new cableships, the Monarch (No. 5) and the Iris (No. 3) were launched - the first in the world to be designed for rapid cable loading using the 'pan loading' system developed by the Post Office.

Her Majesty Queen Elizabeth II opened the new Post Office Research Centre at Martlesham Heath near Ipswich, Suffolk - the most advanced centre for telecommunications research in Europe. Now the home of BT Laboratories, and known as Adastral Park from 1999, the Martlesham facility replaced the previous research station at Dollis Hill, North London.


The centenary of the telephone was celebrated on 10 March 1976. A hundred years previously Alexander Graham Bell had heralded a new era in communication with the words, "Mr Watson, come here, I want you" (see 1876 entry). To commemorate the event, the Post Office issued a set of four special stamps in values of 8.5p, 10p, 11p and 13p. All four stamps, designed by Philip Sharland, highlighted the importance of the telephone to the community and featured its use in an every day situation. The 8.5p stamp showed a mother at home making a social or domestic call; the 10p showed a policeman dealing with an emergency call and on the 11p stamp a district nurse taking a social welfare call was depicted. An industrialist at work appeared on the 13p stamp.

Britain's first commercially produced electronic telephone exchange, the TXE4, was opened at the Rectory Exchange at Sutton Coldfield near Birmingham. They were manufactured for public service in exchanges handling 3,000 to 40,000 lines to gradually replace the existing Strowger and crossbar electromechanical exchanges.

During the 1980s and 1990s the TXE and TXK families of electronic and electromechanical exchanges were gradually replaced with System X and System Y digital exchanges in a £20 billion investment programme. The last TXE2 exchanges (Ballycastle, Northern Ireland, Llandovery, Wales and Ramsbury, England) were closed on 23 June 1995. The last TXK crossbar exchange, at Droitwich, was withdrawn in 1994.

The UK network became totally digital on 11 March 1998 with the closure of the last electronic TXE4 exchanges at Leigh-on-Sea and Selby and their conversion to System Y (AXE 10) and System X respectively.

The Post Office opened the world's largest international exchange at Stag Lane, Edgware.

The last manual exchange in the United Kingdom at Portree in the Isle of Skye closed. The UK telephone system was now fully automatic.

Trans-Horizon Radio, using the Troposphere, was inaugurated to provide telephone links between North Sea oil platforms and the mainland.

The first trial was held of the proposed Post Office viewdata development.

Telephone No.764 Mk 2 (the Keyphone) was introduced. The Keyphone was now generally available to subscribers following market trials in 1972 and even earlier trials as far back as 1963. The most striking and original feature of this new telephone was the keypad instead of the conventional dial. With the rapid expansion of subscriber dialling of trunk and international calls, longer telephone numbers had to be used. Keying these numbers was an easier operation than dialling in the traditional manner. Microelectronic circuitry beneath the keypad stored the numbers and transmitted them to the exchange at the normal speed.

The TAT 6 transatlantic telephone cable was laid between Green Hill, Rhode Island, USA and St. Hilaire-de-Riez, France. It was retired in 1994 after 18 years of service.


The Carter Committee, in one of a series of reports commissioned by the Government on public corporations, recommended a further separation of the postal and telecommunications services of the Post Office, and for their relocation under two individual corporations. The findings contained in this report led to the introduction of the British Telecommunications Act, 1981 and the creation of British Telecom as a public corporation in its own right.

A radiopaging service was opened in London in January. This followed a successful four year trial in the Thames Valley, covering an area of 800 square miles and serving over 2,000 people. The London system covered the Greater London area which today is encompassed by the M25 motorway. The working hub of the system was the London radiopaging centre in Faringdon where staff dealt with orders. By July the service had more than 3,000 users.

An experimental packet switching service (EPSS) was introduced for transmitting computer data as a commercial service.


The first optical cable system in Europe to form part of the public telephone network was installed between the Post Office Research Centre at Martlesham and Ipswich telephone exchange. Optical cables contain glass fibres along which telecommunications signals can be transmitted as pulses of light rather than electricity as in earlier copper cables.

After a design study in which British Post Office staff participated, the Orbital Test Satellite of the European Space Agency (of which Britain was a member) was launched from Cape Canaveral. Its purpose was to test the feasibility of satellite communication between the countries of Europe.

A fourth aerial was completed at the Post Office Satellite Communications Station at Goonhilly for use with the Oribital Test Satellite.

The Post Office opened its second satellite communications station at Madley, Hereford.

One of the world's largest all-electronic telex exchanges, and the first in Britain to use Stored Programme Computer control (SPC), was brought into service in London.

Plans were made to update the payphone system by exploiting the benefits of electronic technology. It was decided that the new system would be based on the pre-payment approach with the refund of unused coins where appropriate.


The International launch of the System X digital exchange was held at Telecom 79 in Geneva.

The STD system, commenced in 1958, was completed to allow direct dialling between all UK subscribers.

The first electronic, microprocessor-controlled payphone, the 'Blue Payphone' was introduced. A later version, Blue Payphone 2, was introduced in 1983

A digital telephone exchange was opened for trial in Glenkindie, Aberdeenshire, making Glenkindie subscribers the first to be connected directly to a digital exchange.

An evaluation model UXD 5 digital telephone exchange was opened for trial in Glenkindie, Aberdeenshire, making Glenkindie subscribers the first to be connected directly to a digital exchange. This was the first digital public exchange introduced into the UK network.

The introduction of UXD 5's into the network brought rural customers digital Network Services ahead of their counterparts living in more rural areas.

The UXD 5 rollout enabled the business to establish remote working practices in advance of NOU's, thus reducing the overall cost of ownership while providing customers with an improved quality of service.

UXD 5 was enhanced over the years, so that by 1998 it was able to carry an acceptable range of digital facilities, such as Call Waiting, 3 Way Calling; Call Diversion, Call Barring and fully itemised billing. During 1998 further digital services were added, including Calling Line Identity, Caller Return (1471) and single stage indirect access. ISDN 2e was also rolled out to UXD 5 exchanges during 1998.

Prestel, the world's first public viewdata service, was opened in London in September.

The Post Office launched a facsimile service, Fonofax.

A new international organisation, INMARSAT, was created this year to be responsible for the formation of a global maritime communications system. BT remained a major participant, and an aerial operating to the INMARSAT system came into service at Goonhilly during 1983. Originally set up to provide marine communications, it subsequently expanded into the delivery of data to mobile phones and laptop computers.

In April 1999, - by this time an 86-strong co-operative - INMARSAT became a privatised company. Henceforward, the organisation would be run by a 14-member board of directors, on which BT would be represented as the second largest investor. This was the first time that a privatisation involving an inter-governmental organisation had taken place. At the time of its privatisation, INMARSAT - short for International Marine Satellite - owned nine satellites and had 107,000 international subscribers. It had annual sales of $378 million in 1996, making a profit of more than $60 million, and was growing at more than 30 per cent a year.


A distinguishing name was given to the telecommunications business of the Post Office - British Telecom - following a Government decision to separate the major Post Office operations. Sir Keith Joseph, Industry Secretary, had announced in the House of Commons in July the Government's intentions to restructure the Post Office and relax the monopoly over terminal equipment and value-added services. However, British Telecom remained part of the Post Office until the following year.

The first of the British-designed processor-controlled digital switching systems designated 'System X' was installed in Baynard House, London. It was a tandem junction unit which switched telephone calls between around 40 exchanges. It was brought into service on 1 July and formally inaugurated in September. The development of 'System X' exchanges was the linchpin of the policy to modernise the existing network by replacing analogue plant with digital switching centres interconnected with digital transmission links. It enabled an increased variety of facilities and services to be made available to the telecommunications user, resulting in ISDN (Integrated Services Digital Network) and ISDN 2 .

The Public Data Packet Switching Service (PSS), a nationwide data network which switches information in the form of individually addressed 'packets' of data, was introduced. PSS proved particularly cost-effective where data transmission was of the intermittent or of the transaction type - for example, point-of-sale terminals, credit verification, communicating word processor or accessing databases both in the UK and overseas. It opened for full commercial operation on 20 August the following year.

The Post Office Tower public restaurant was permanently closed from 14 June for security reasons.

The Prestel service was expanded in October to give greater access nationwide. The Prestel network afforded 62 per cent of telephone subscribers local telephone access to Prestel.

The world's first purpose-designed optical fibre submarine cable, a five nautical mile test loop, was laid in Loch Fyne, Scotland in January.

The first operational optical fibre link in Great Britain went into service between Brownhills and Walsall in the West Midlands, a distance of 9 km..

Two new international telephone exchanges - Mondial and Thames - were opened in London.

The Herald, the first of British Telecom's microprocessor controlled key button systems was introduced in November of this year.

Euronet/Diane, the EEC based information retrieval system, was inaugurated.


British Telecommunications, trading as British Telecom, severed its links with the Post Office under the British Telecommunications Act, 1981 and became a totally separate public corporation on 1 October. They were now two separate organisations with their own chairmen and boards of directors.

It was also at this time that the first steps were taken to introduce competition into the United Kingdom telecommunications industry. In particular, British Telecom lost its monopoly of the supply of customer premises equipment (CPE) except, as an interim measure, providing the first telephone at an address. In practice, it had become increasingly difficult in the years leading up to the Act to exercise this monopoly as more and more unauthorised equipment was added to the network.

The Act introduced an independent approval regime for CPE. Before 1981, the Post Office and then British Telecom had alone decided what could and could not be connected to its network. The 1981 Act established an independent procedure to set standards and approve equipment for connection to the network. Standards were now set by the British Standards Institution (BSI), while the British Approvals Board for Telecommunications (BABT) issued approvals based on independent evaluations. This was the first step in separating regulatory and operational activities which was essential if private suppliers were to be able to compete with BT on equal terms.

The 1981 Act permitted further liberalisation by allowing network competition. The Secretary of State for Trade and Industry was empowered to grant licences to operators other than BT to provide network and value added services. This was a recommendation of the Beesley Report, published in April this year, which suggested full freedom for private suppliers to use the national network to provide Value Added Network Services (VANS) at a flat rate.

British Telecom offered telephones for sale for the first time as an alternative to rental. Eleven phoneshops were opened in major department stores.

New style telephone plugs and sockets were introduced on 19 November, enabling convenient movement and replacement of telephones and customer equipment.

The first 'System X' digital exchange to which subscribers were directly connected was opened at Woodbridge in Suffolk.

The development of 'System X' exchanges was the linchpin of the policy to modernise the existing network by replacing analogue plant with digital switching centres interconnected with digital transmission links. It enabled an increased variety of facilities and services to be made available to the telecommunications user, resulting in ISDN (Integrated Services Digital Network) and ISDN 2 .

Thereafter, the network was rapidly modernised and more and more exchanges converted to digital systems. In 1970, 8.5 million exchange lines were Strowger, representing 98 per cent of the total. As late as 1980, when the number of Strowger lines reached a peak of 13 million, 75 per cent of the network was Strowger. Throughout the 1980s and 1990s modernisation of the network was rapid, so that in July 1990 the long distance or trunk network became totally digital. The last Strowger exchanges (Crawford, Crawfordjohn and Elvanfoot, all in Scotland) were withdrawn on 23 June 1995.

During the same period the TXE and TXK families of electronic and electromechanical exchanges were gradually withdrawn. The last TXE2 exchanges (Ballycastle, Northern Ireland, Llandovery, Wales and Ramsbury, England) were also closed on 23 June 1995. The last TXK crossbar exchange, at Droitwich, was withdrawn in 1994.

The UK network became totally digital on 11 March 1998 with the closure of the last electronic TXE4 exchanges at Leigh-on-Sea and Selby and their conversion to System Y (AXE 10) and System X respectively.

The first cashless, card-operated payphone - the Cardphone - was introduced as a new service and to combat damage caused by vandals attempting to break into payphone coinboxes. The 10, 20, 40, 100 or 200 unit Phonecard was inserted in the payphone and the call made in the usual way, with the charge for the call erased from the phonecard until the units were exhausted.

Radiopaging was extended to give a virtually nationwide service.

Britain's first automatic carphone service, System 4, was launched in London on 14 July, whereby customers were able to make direct calls without having to go through an operator

A microfiche system was introduced in inland directory enquiry centres to speed up the response time to subscribers' enquiries.

Prestel was extended to Holland, Italy, Sweden, Switzerland and West Germany.

Prestel launched an electronic "mailbox" service in London. It was extended nationwide in 1984.

BT launched the "It's for You" campaign, featuring such characters as Neptune and the Hunchback of Notre Dame, followed by a series of animal themed advertisements. The campaign ran until 1985.

British Telecom introduced the Answering and Recording Machine No 101, following field trials of the Answering and Recording machine No 1 by the Post Office from 1979. This was the first British Telecom supplied answerphone, although models had been available from other suppliers for some years. By law these had to be approved at that time by the Post Office / British Telecom as meeting their standards. Some were approved, though in the years leading up to the Telecommunications Act 1981 (which led to greater choice for customers in obtaining equipment) many answerphones and other items of equipment on the market were not approved.

Cable & Wireless Ltd. was privatised in November, the Government selling 50 per cent of its shares in the company


The Government licensed Mercury Communications Ltd. as the main competitor to BT as a telecommunications network provider. Mercury, originally owned by a consortium of Cable & Wireless, British Petroleum and Barclays Merchant Bank, was later a wholly owned subsidiary of Cable & Wireless, and in 1999 was part of Cable & Wireless Communications, formed from a merger with Nynex of the United States, Bellcable Media and Videotron.

Customers were able to buy terminal equipment from suppliers other than British Telecom from June this year. Equipment had to meet standards set by BABT

On 19 July, the Government formally announced its intention to sell up to 51 per cent of British Telecom to the public - the first example of the privatisation of a public utility. A Telecommunications Bill was introduced the same year. The future for British Telecom was described thus by Kenneth Baker, Minister for Industry and Information Technology: "The Bill creates freedom from Treasury and ministerial control. It also gives freedom to BT to grow, to operate overseas, and to make acquisitions ... the market is growing so quickly that BT can expand only by becoming a free, independent company."

The world's longest optical fibre telephone cable was brought into service between London and Birmingham.

British Telecom introduced the Telecom Gold electronic mail service.

IDD (International Direct Dialling) was made available throughout the United Kingdom.

Telemessages (overnight delivery services) superseded the inland telegram service on 30 September.

Bureaufax was established, a facsimile service for sending documents between offices in the UK and more than 60 other countries.

The first national directory of facsimile users' numbers was published by British Telecom.

The first 'Transaction Telephones' were installed in traders' premises - a system which helps fraudprevention by enabling plastic credit cards to be checked via the data network.

The CS Iris served as a despatch vessel to carry stores, mail and military personnel in the South Atlantic during the Falklands conflict.

The Telecom Technology Showcase was opened - an exhibition centre showing the development of communications from the earliest days to the present era by means of displays of telecommunications equipment. From 1991 the Showcase has been known as 'The Story of Telecommunications', part of the BT Museum.


Purpose-built Telcare (Telecom Customer Attitude Research) centres opened, providing continuous and up-to-date measurements of customers' opinions, enabling British Telecom to respond quickly to customers' needs.

Kenneth Baker, Minister for Information Technology, announced in the House of Commons on 17 November that British Telecom and Mercury Communications would enjoy a 'duopoly' on basic telecommunications services for the following seven years (except for the City of Kingston-upon-Hull which would continue to operate its own service), after which the position would be reviewed. This was to give Mercury security in the early stages of its development to establish itself as an effective competitor to British Telecom, and to give British Telecom time to adjust to competition in the private sector.

Earlier in the year, in February, the Government accepted a recommendation of a report by Professor Littlechild that British Telecom's tariff increases for the five years after liberalisation should be pegged below the inflation rate.

A new Code of Practice for Telecommunications Services was published by British Telecom to reflect the rights of customers following changes by the Telecommunications Act, 1981. Before the Act, British Telecom had no liability for its services. The Code was produced in consultation with the Post Office Users' National Council and the Office of Fair Trading.

The transatlantic submarine cable, TAT 7, laid the previous year, was officially inaugurated on 16 September.

Mercury launched telecommunications services in the City of London.

British Telecom's first satellite coast station came into service with the opening of a new dish aerial at Goonhilly. Telephone and telex calls could be made or received direct for the first time to almost anywhere in the world, via Britain.

KiloStream and MegaStream digital private circuit services were launched.

British Telecom offered car telephone radio sets for the first time.

Telecom Tan, an advanced operator controlled messaging service, was launched.

Telecom Red, a range of security systems using telephone lines to link customers' premises to emergency services, was introduced.

The microprocessor-controlled press-button Blue Payphone 2 was introduced as part of �160 million modernisation programme of the payphone system. The new payphone replaced the pay-on-answer payphones.

The first electronic, microprocessor-controlled payphone, the 'Blue Payphone' had been introduced in 1979.

British Telecom's first cordless phone - the Hawk - came onto the market. It used a radio to link the mobile extension set, which could be up to 600 feet away, with the customer's telephone line.

Display Page, British Telecom's radiopager with a digital message display, was launched. A ten-digit liquid crystal display on the new pager could be used to identify the caller (by giving a phone number), or to convey a message.

Itemised billing was introduced on a trial basis on trunk and international calls in part of Bristol and Bath.

Confertel, a new flexible and inexpensive means of holding meetings by telephone, was introduced.

The Phototelegraph Service, a form of facsimile service operated by the Post Office and British Telecom for more than 50 years was closed on 31 March. It was replaced by the more modern Bureaufax Service.


The Telecommunications Bill, delayed the previous year because of the General Election, received Royal Assent on 12 April and became an Act of Parliament. British Telecommunications had been incorporated as a public limited company (plc) in anticipation of the Act on 1 April. The transfer to British Telecommunications plc from British Telecom as a statutory corporation of its business, its property, rights and liabilities took place on 6 August.

Initially, all shares in the new plc were owned by the Government, but in November 50.2 per cent of the new company was offered for sale to the public and employees in this first flotation of a public utility. Shares were listed in London, New York and Toronto. British Telecom's flotation was the first of a series of privatisations of state-owned utilities throughout the 1980s and into the 1990s. The company's transfer into the private sector continued in December 1991 when the Government sold around half its remaining holding of 47.6 per cent of shares reducing its stake to 21.8 per cent. Virtually all the Government's remaining shares were subsequently sold in a third flotation in July 1993, raising �5 billion for the treasury and introducing 750,000 new shareholders to the company.

In July 1997 the new Labour Government relinquished 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.

As a plc, British Telecom had to operate under normal company law, particularly in the manner prescribed for public limited companies. Privatisation also released the new company from the constraints of the Public Sector Borrowing Requirement (PSBR), allowing British Telecom greater freedom in borrowing and investment.

The 1984 Act, in addition to providing for the privatisation of British Telecom, abolished the exclusive privilege of running telecommunications systems and established a framework to safeguard the workings of competition. This meant that British Telecom finally lost its monopoly in running telecommunications systems, which it had technically retained under the 1981 Act despite the Secretary of State's licensing powers. British Telecom was now required to hold a licence to run such a system in the same way as any other telecommunications operator. The 1984 Act, in fact, made running a telecommunications system without a licence a criminal offence. The licence granted to BT lays down strict and extensive conditions affecting the range of its activities, and is subject to close scrutiny and review by the Director General of Telecommunications, the head of the Office of Telecommunications (Oftel) which was set up at this time. A system of regulation in the field of telecommunications had been recommended the previous year in the Littlechild Report.

The creation of Oftel as a non-ministerial Government department to regulate the telecommunications industry completed the separation of regulatory and operational functions begun by the 1981 Act. In particular, Oftel was to promote competition in the industry and protect the rights of consumers. Oftel could achieve this by the enforcement of the various licences granted to those operating telecommunications services, employing powers defined in the 1984 Act which could include seeking licence amendments. The political responsibility for UK telecommunications policy remained with the Secretary of State for Trade and Industry.

BT Centre, the company's new headquarters building designed by the Property Services Agency, was opened in June at 81 Newgate Street in the City of London. Construction of the building had begun in 1980 on the site of the Old Central Telegraph Office. The new design was a large granite and Portland stone building around an atrium, with its mass offset by curved corners and considerable use of glass, notably the extensive use of glazed tubular steel barrel vaults spanning the atrium. In style it is modern and forward looking, but in building materials it echoes the old GPO West - which housed the Central Telegraph Office for so many years - and the neighbouring St Paul's cathedral, also built of Portland stone. The interior of the building was extensively refurbished from 1997 to 1999 to make better use of space, conform to modern approaches to working, and exploit the latest telecommunications technology for more effective and fulfilling working.

Much larger than the building it replaced, BT Centre now completely covers the route of the old Bath Street, closed in 1934, and the site adjoining the old CTO. The main entrance of BT Centre follows the line of the lost street. Modern in design and appearance, BT Centre is a reflection of BT - a company committed to meeting today's telecommunications needs.

The first UK, and the world's largest, digital international telephone exchange was opened at Keybridge House in London on 23 May. The new exchange was supplied by Thorn Ericsson Telecommunications Ltd, and was based on the AXE10 (System Y) design. It provided an extra 13,800 lines, and could handle up to 144,000 call attempts an hour.

London's first satellite earth station was opened on a 3.5 acre site in Pier Road, North Woolwich near the old King George V Dock in Dockland. It was designed to handle two main areas of satellite telecommunications business: the demand for business services from the City and the provision of transmission facilities for satellite television and radio companies.

The Teleport began operations in February, transmitting commercial cable TV broadcasts using the European Communications Satellite (ECS). It was originally called the London North Woolwich Earth Station, but was renamed the London Teleport in April, coinciding with an official visit by HRH The Duke of Edinburgh. It was opened officially in October.

The Teleport was sited in North Woolwich because, with the Thames at its southern boundary, the site was protected from any future high rise development which might impede the clear outlook required by the antennas to transmit and receive signals to and from satellites. The area was also free from any radio interference.

The London Teleport was the hub of BT's international SatStream service, videoconferencing and several other specialised satellite services from computer data transfer, facsimile transmission, telex and telephone communications over private leased lines.

Ships using INMARSAT - the maritime satellite system - could access a wide range of computers and databases round the world from 9 January through the International Packet Switching Service (IPSS) provided by British Telecom International.

International Kilostream was launched, a new digital transmission service using satellite technology especially suited to the transfer of large amounts of data to overseas destinations on a daily basis.

The world's first 140 Mbit/s single-mode optical fibre system was opened between Milton Keynes and Luton.

British Telecom's first overseas office was opened in New York.

The phone book was redesigned in conjunction with consultants Wolff Olins and relaunched as the Phone Book - first, in central Manchester in March.

Prestel received the Queen's Award for Technological Achievement.

Prestel Mailbox was introduced nationwide on 15 October.

Trainphone, the first public payphone on a train, was introduced on a trial basis on services from Paddington to South Wales and the West Country. It operated via the Cellnet network.

Slimtel was launched, the first telephone instrument designed and manufactured by British Telecom.

Voicebank voice messaging service was inaugurated.

Star Services were launched, and provided new push-button facilities such as 'repeat last call' and 'call barring'. This facility was available to customers connected to 'System X' exchanges, and began at Cheltenham on 26 January.

The first 'System X' exchange in Hull was opened on 28 November, exactly 80 years after the opening of the town's first municipal exchange.

The search for a new voice for the speaking clock ended on 5 December when Brian Cobby, an assistant supervisor in a telephone exchange at Withdean, Brighton, was selected from 12 finalists in British Telecom's Golden Voice competition.

The new speaking clock was inaugurated on 2 April 1985.

The Internet forerunner, ARPANET, was divided into two networks, one to serve the military (MILNET) and the other to support academic research (ARPANET). The US Department of Defense continued to support both networks.


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.


British Telecom acquired Dialcom, International Aeradio (IAL) and a majority holding in Mitel Corporation. The 51 per cent stake in Mitel was sold to funds advised by Schroder Ventures in 1992.

The franchise to operate the Isle of Man's telecommunications system was awarded to British Telecom's Manx Telecom

The computerisation of directory enquiries was completed, replacing the existing microfiche system. Response times to customers' enquiries was now even faster.

A trial of an electronic Yellow Pages system was started.

An opto-electronics joint venture with Du Pont, BT&D Technologies, was initiated to manufacture opto-electronic devices.

The first Customer Services System (CSS) went into service. In 1999 it was the biggest civilian computer system in Europe, providing BT with all the information to support its core customer activities, from billing and order taking to sales support and fault recording.

The first international optical fibre undersea link between the United Kingdom and Belgium was opened.

The world's first all-digital international public telephone service was opened between gateways in London and Tokyo.

The first Thorn-Ericsson AXE10 (System Y) local digital exchange was opened at Sevenoaks in Kent on 27 November.

DIY telephone extensions were permitted for the first time. British Telecom kits became available.

Hong Kong and Tokyo offices were opened, and shares were listed on the Tokyo stock exchange for the first time.


Manx Telecom Ltd came into operation as a wholly-owned subsidiary of British Telecom on 1 January, with a 20-year licence to operate the Isle of Man's telecommunications system.

Itemised billing was introduced on a trial basis in the City of London in January for six months. An £87million programme to provide itemised telephone bills for all customers was announced in December.

Electronic Yellow Pages was launched on 8 January.

British Telecom announced the launch of its Centel 100 Centrex service in March.

Textdirect, an enhanced telex service, was launched in April.

The Under Secretary for Industry confirmed in August that the two existing UK cellular radio operators - Cellnet and Racal Vodafone - would provide the UK part of the pan-European digital cellular radio service due to come into operation in 1991. The following month Cellnet and Racal Vodafone signed a memorandum of understanding with 13 other European cellular radio operators.

Sir George Jefferson resigned as Chairman of British Telecom at the company's annual general meeting. His successor was Iain Vallance.

The world's first instantaneous translation of speech by a computer was demonstrated by British Telecom's Research Laboratories.

The major activities of British Telecom International's marine services were transferred to a wholly owned subsidiary of the Company known as BT Marine Ltd. on 1 October.

BT Marine was sold to Cable and Wireless in November 1994.

The final digital trunk switching exchange, in Norwich, entered service in November.

The 500th System X digital local exchange was opened.

The Hull Corporation telephone service was transferred on 7 December to Kingston Communication (Hull) plc, a company owned by the Kingston-upon-Hull City Council.


British Telecom and the Government of Gibraltar formed a joint venture company called Gibtel to operate Gibraltar's overseas telecommunications services from 1 January.

The British Telecom Chairman Iain Vallance opened the City Fibre Network, the country's first fibre optic network, in the City of London on 27 January.

Itemised billing was introduced in the City of London as a permanent service.

The second UK digital international telephone exchange was opened at Kelvin House.

The Sharelink share dealing joint venture with Albert E Sharp & Co was launched.

A major development programme of Monarch digital telephone systems was launched with GECPlessey Telecommunications.

The 1000th 'System X' digital local exchange was opened.

An optical fibre undersea link to the Isle of Man - the longest unregenerated system in Europe - was inaugurated on 28 March. The following year, the equivalent of 25,000 simultaneous telephone conversations was carried over a single optical fibre link in the optical submarine cable.

The British Telecom credit card was introduced on 14 November, and could be used to make calls on any telephone (including payphones) in the United Kingdom. The card provides a secret Personal Identification Number (PIN) and a unique account number. The cost of any calls made was added to the next home or office telephone bill along with details of each call.

The service was relaunched as the BT Chargecard the following year. In 1991, when the service was used by over 600,000 customers, the 20p facility charge on its use for directly-dialled calls was dropped. This attracted large numbers of personal users, whereas previously the service attracted mainly business customers.

BT introduced a new, simpler pricing structure for Chargecard calls made with its Chargecard from 7 August 1997. There was now a single 20p-a-minute rate for all inland direct dialled calls, regardless of time of day and distance. All direct dialled calls made within and from the UK were charged per second, with the minimum fee of 9.5p remaining unchanged.

At the same time there were reductions on some international routes. Changes included a 28 per cent reduction in the daytime cost of calling Japan, a 26 per cent drop in the cheap rate cost of calling Austria, Finland, Malta and Norway and a 21 per cent reduction in the cost of calls to the UK from the USA and Canada.

On 1 August 1998 the Chargecard Gold card was launched. Existing high spending customers of the existing residential Chargecard service automatically received a free replacement Chargecard Gold card and an invitation to register to collect either AIR MILES or to make savings on home telephone bills using BT TalkTime minutes.

The scheme was open to Chargecard customers who spent more than £300 on their Chargecard. Members of the new Chargecard Gold scheme were entitled to earn one AIR MILES award or 10 minutes of BT TalkTime for every £5 of Chargecard calls made. Family members using the same account were given their own Chargecard Gold cards and qualified for the same benefits which were credited to the account. AIR MILES were no longer available for new PremierLine customers from February 1999.

Talking Pages, another service offered by Yellow Pages, was launched.

British Telecom International and INMARSAT started trials of the Standard C satellite system, the smallest and cheapest maritime satellite terminal up to that time.

International Megastream was launched. Its first customer was Shell International Petroleum.

TAT 8, the world's first transoceanic optical fibre cable, came into service. It was laid between Tuckerton, New Jersey, USA and Widemouth Bay, Britain via Penmarch, France.


The world's first satellite telephone communications system for airline passengers, Skyphone, had its commercial debut on a British Airways 747 in February.

Skyphone was operated by a consortium consisting of British Telecom, Singapore Telecom, and Norweigan Telecom. Using digital satellite technology giving high quality links and security, Skyphone provided air-to-ground, ground-to-air, and even air-to-air telephone communications.

British Telecom handed over a cheque for £753 million, then the largest cheque ever written in the UK, as part of the company's corporation tax payments for the 1987/88 financial year.

British Telecom launched the M6000 family of business computers, designed and made by the company at its Fulcrum factories in Birmingham.

A new telephone directory enquiries centre for London was officially opened on 25 January in Darlington. This centre, and those in Torquay and Yeovil opened the previous year, were set up in response to an explosion of calls following the computerisation of the directory enquiry service. Siting them outside London and the South-East eased employment problems and made use of existing accommodation.

On 26 January, Secretary of State for Trade and Industry Lord Young announced his decision to grant four licences to operate telepoint services - mobile communications systems similar to Cellnet, but aimed at a wider audience. One consortium, involving Standard Telecommunications Cable (STC), British Telecom, France Telecom and Nynex, was granted a licence to run the Phonepoint service, using the cordless (CT2) handsets. Phonepoint launched its service in August the same year, and was the world's first telepoint operator.

The licences granted were to last for a period of 12 years and were to be monitored and enforced by the Office of Telecommunications (OFTEL). Three of the four telepoint services were closed down in 1991, including Phonepoint on 1 October. The last service - Rabbit - run by Hutchison Communications was launched in 1992, although that was also subsequently closed down.

British Telecom introduced the Customer Service Guarantee, a compensation scheme covering telephone line installations and repairs. Under the scheme customers were able to claim compensation or a fixed penalty if they were without telephone service for more than two clear working days because of British Telecom's failure to install a line on the agreed date, or to repair a telephone line promptly.

The Customer Service Guarantee was revised and reissued several times over the following years, and enhanced by the BT Commitment.

British Telecom acquired a stake of slightly more than 20 per cent of McCaw Cellular Communications Inc, the USA's leading cellular telephone operator, thereby taking a major foothold in the fast-growing worldwide communications market. McCaw later merged with a subsidiary of AT&T, whereupon on 19 September 1994 BT acquired a holding of AT&T shares in exchange for its McCaw shares. BT sold this holding in its entirety in February 1995 by means of a public offering.

The Telecommunications Vocational Standards Council (TVSC), a body to establish vocational qualifications for the telecommunications industry, was set up by British Telecom, Mercury Communications Ltd and STC Telecommunications Ltd.

Automatic Voice Response (AVR) was introduced into the directory enquiries service to give a faster response to callers. The voice of actress Julie Berry was digitally recorded speaking all British Telecom's 6,000 exchange names, plus the full set of numbers and number combinations. When a number requested by a caller was found by the operator, the AVR equipment assembled a number message from its store of exchange names and numbers recorded by Julie Berry and gave a recorded message to the caller allowing the operator to speak to the next caller.

The "Beattie" series of advertisements starring comedienne and actor Maureen Lipman were launched. They were broadcast until 1991.

BT Marine, British Telecom's undersea cable laying subsidiary, announced in November the building of a new 12,500 tonne cableship to replace the CS Alert in 1991, to be called CS Sovereign. The new ship was launched in 1991.

BT's massive programme to modernise its local telephone network reached the half way stage at the end of June when St Paul's exchange came into service. It was the 3,319th local exchange to be switched over from electromechanical to digital technology.

By this time BT had spent more than £15 billion on supporting, modernising and expanding mainstream services in the UK. The trunk network had become fully digital the previous year.

British Telecom purchased the Tymnet network systems business and its associated applications activities from the McDonnell Douglas Corporation on 19 November for $355 million. Its activities included TYMNET, the public network business, plus its associates private and hybrid (mixed public and private) network activities, the OnTyme electronic mail service, the Card Service processing business, and EDI*Net, the US market leader in electronic data interchange.

BT Tymnet anticipated developing an end to end managed network service for multi-national customers, and developing dedicated or hybrid networks that embraced major trading areas. Customers would be able to enjoy one-stop-shopping for global data networks, and a portfolio of products designed for a global market place.

These services were subsequently offered by BT Global Network Services, and subsequently by Concert as part of Concert Global Network Services after the Concert joint venture company was launched on 15 June 1994.

The BT Chargecard was introduced.


British Telecom's long distance network became totally digital on 3 July with the closure of Thurso electro-mechanical exchange in Scotland, completing the trunk lines modernisation beginning in 1985.

British Telecom's Worldwide Network Management Centre at Oswestry, Shropshire, was opened on 5 September at a cost of £4 million. The Centre monitored all of BT's System X exchanges (57 trunk and 373 local exchanges) and the company's three digital internal exchanges, identifying and remedying many problems before the customer became aware of them. Processors that controlled the exchanges generated data to the management floor at the Centre, where up to 30 network managers sat at specially designed consoles where they were fed continuously updated information on the number, destination and duration of calls made. From this data an overview of the digital network allowed efficient control and planning, protecting the network against the danger of congestion. Any potential trouble spots were highlighted on 25m (80ft) long video walls, at that time the largest in Europe, giving up to the minute pictures of how the networks were performing.

British Telecom announced the sale of its telephone manufacturing business based at Cwmcarn, Gwent to STC. Whilst owned by British Telecom, the manufacturing facility had been run by a wholly-owned subsidiary, BT Consumer Electronics.

This subsidiary also ran a telephone refurbishing activity, which was sold on 2 April 1991 to Fulcrum Communications Limited, an associated undertaking in which BT then held a 25 per cent equity interest.

These disposals ended 120 years of involvement of the Post Office and British Telecom involvement in the direct manufacture and refurbishment of telegraph and later telephone equipment. At its largest, the Post Office/British Telecom Factories Division consisted of eight factories around the country (three in London, three in Birmingham, one in Edinburgh and one in Cwmcarn) and employed 4,000 people.

BT Factories had been reorganised into two subsidiaries in 1985, BT Fulcrum Communciations and BT Consumer Electronics, to comply with terms of the BT Licence. These stated that any part of British Telecom involved in the production of telecommunications equipment had to be transferred to a subsidiary company by July 1986.

Under the agreement for the sale of the Cwmcarn facility, STC was to continue to supply the Vanguard telephone, which was thus the last telephone instrument to be manufactured by British Telecom.

British Telecom also gradually withdrew from involvement with cable operating companies as part of its general strategy of concentrating on its core business - providing network-related products and services to customers around the world. During the course of the year British Telecom sold its holdings in Thames Valley Cable, Ulster Cable, Aberdeen Cable Services Ltd., Swindon Cable and Coventry Cable.

The 100 millionth BT Phonecard was produced.

The biggest change to the London telephone numbering system since the introduction of All Figure Numbering  took place on 6 May with the code change from 01 to 071 for inner London and 081 for outer London.

The code change was necessary because of the natural growth in demand for numbers and the proliferation of 'number hungry' equipment such as fax machines and PBXs with direct dialling facilities. Changing to 071 and 081 doubled the number of available London numbers. British Telecom had publicised the code changes over the previous year through television, radio, newspapers, poster sites, mailings and so forth. A code change party at Telecom Tower attended by several celebrities marked the actual changeover itself, which was broadcast live on television. To further celebrate the occasion British Telecom donated £1 million to the Royal Academy of Dramatic Art towards its new premises in central London.

There was a further code change in 1995.


On 5 March the Government's White Paper 'Competition and Choice: Telecommunications Policy for the 1990s' was issued. In effect, it marked the ending of the duopoly which had been shared in the UK by British Telecom and Mercury Communications since November 1983 and the build up to privatisation. The new, more open and fairer policy allows customers to acquire telecommunications services from competing providers using a variety of technologies. Independent 'retail' companies would also be permitted to bulk-buy telecommunications capacity and sell it in packages to business and domestic users. The White Paper was endorsed by British Telecom, the new policy allowing the company to compete freely and more effectively by offering flexible pricing packages to meet the needs of different types of customer.

ISDN 2 (Integrated Services Digital Network) was launched on 7 February, offering new applications in addition to enhancing existing services. Customers were able to take advantage of vastly increased computer to computer data transmission times. Other benefits included low cost video links through which speech and images were carried, the ability to transmit an A4 page in a couple of seconds over facsimile and an improved telephone service with faster call set-up and clearer speech.

ISDN 2 was gradually replaced by ISDN 2e following the latter's introduction in October 1997 to comply with the latest European ISDN standard.

BT launched Phone Disc in March, an electronic phone book, as an alternative to directory enquiries and phone books. The CD contained all 17 million residential and business entries covering the UK, although ex-directory numbers were not included.

The standard networkable version was initially available for an annual subscription of £2,200, but in October 1995 the charge was reduced to £1,600 a year. Customers received an updated Phone Disc every quarter.

The annual version of Phone Disc was first available at a cost of £950, but this was reduced in September 1994 to £299 and again to £199 in November 1995.

For high volume multi-server users there was another network version, again updated quarterly, which was launched in 1994 at £4,000 a year, reduced in November 1995 to £3,000 a year.

Originally available in MS-DOS, a Windows based version of all three options was launched in September 1996. A Welsh bilingual version became available from August 1992.

Phone Base was introduced at the same time as another alternative to directory enquiries. Phone Base was a dial-up service connecting a customer's terminal or PC to BT's database via a modem and the telephone network. There were no connection or rental charges, and the customer paid for the cost of the call over the network. As with Phone Disc, ex-directory numbers were not available.

A new corporate structure took over from the existing organisation on 2 April when British Telecom was relaunched as BT, the company's new trading name. Introduced over the previous 12 months since the unveiling of Project Sovereign - the name given to the initiative - the objective was to set-up a company structure best suited to face the telecommunications challenges of the 1990s. The name Sovereign was selected since it reflected the company's commitment to meeting customers' needs - 'The customer is King'. The new organisation focused on specific market sectors to cater for the different needs of BT customers - the individual customer, the small businessman or the multi-national corporation, and so forth. The new BT was launched with a new corporate identity suitable for a quality company in a highly competitive world marketplace. Putting Customers First, the programme which followed on from the reorganisation and the BT Commitment encapsulated BT's new identity - a company that was open and easy to deal with. This was further reflected in the BT logo, a symbol which represented two human figures, one listening, one speaking, brought together by BT's technology and understanding of customers' needs.

Free call-barring was introduced on 1 February which allowed customers to prevent calls being made to premium rate services from their lines.

Charges were introduced for directory enquiries for the first time from 2 April. People using the service were thereafter charged 43.5p (45p after that years rise in VAT) for a search for up to two numbers. Despite adverse media attention on this development, BT demonstrated that the new system would be a fairer way of paying for the service. The service as a whole cost £250 million a year, which was borne by every customer through higher call charges whether they used the service or not. There was no extra revenue for BT, since all income generated from charging for directory enquiries was channeled into reducing call charges. At the same time charges were introduced, call charges were reduced by 7.3 per cent for national calls and 4.5 per cent for local calls. Enquiries from public payphones remained free, and there were no charges for people with visual or other disabilities who were not able to use phone books.

On 1 September 1994, BT cut the cost of directory enquiries to 25p incl. VAT, although the cost rose again to 35p on 18 February 1998. This reflected an £84 million investment in new technology over the following year to further improve the service. International directory enquiry charges on '153' also increased in 1998, from 60p to 80p per enquiry.

The first BT payphone available for sale as well as rental was launched. Until now BT had offered private payphones for rental only. Known as the Payphone 190

the tabletop payphone replaced two previous BT models - Moneybox and Payphone Mk II.

On 30 May a new BT cableship was launched in Rotterdam named CS Sovereign, the first new wholly owned cableship for 15 years. She was built by the Dutch firm, Van der Giessen-de Noord, who won the £32 million contract after international competitive tendering. CS Sovereign handled repair and maintenance to fibre optic systems and intended to replace CS Alert.

Braille telephone bills, a new service for blind customers, were introduced on 12 August. Partially sighted people also benefited with the introduction of large print bills at the same time. BT worked jointly with the Royal National Institute for the Blind to produce the bills, which because of space constraints, only showed the details contained on the ordinary non-itemised bill.

On 19 September BT announced the formation of a new subsidiary - Syncordia. Providing multinational companies with tailor-made voice and data communications networks, Syncordia offered an international network with end-to-end solutions for their complex international communications systems. Traditionally, companies around the world had to negotiate with individual national telecommunications administrations for the provision of telecommunications services. By April 1993 the new company had won over $200 million of business.

In September 1995, BT's outsourcing contracts had generated over a billion pounds of revenue, BT integrated its UK and international telecommunications outsourcing businesses into a single service under the Syncordia brand. Outsourcing would be provided by BT's US partner in the Americas and by BT in the rest of the world. The concentration of outsourcing services under the single Syncordia brand underlined BT's commitment to provide a consistent, high quality service to customers wherever in the world they operated.

Syncordia was merged in May 1999 with BT's equally successful systems integration business Syntegra to form a new division, BT Solutions, to sit alongside the other recently created Divisions, BT UK and BT Worldwide. BT Solutions combined complimentary skills of the previous two businesses under a single brand to meet all customer needs for integrated business solutions.

Following BT Chairman Iain Vallance's pledge at the annual shareholders' meeting in Nottingham on 18 July to introduce a "customers' charter" to match BT's determination to be the phone company with the best customer service in the world, BT launched the BT Commitment on 20 September.

A complete set of service standards for customers, the BT Commitment built on the success of the Customer Service Guarantee first launched in 1989. It specified target response times for orders and repairs, and connection rates and speed of connection. It also guaranteed compensation for missed targets, particularly if the customer suffered financial loss as a result. The BT Commitment, which was part of BT's on-going process of continuous improvement which began under the Putting Customers First programme the following year, also promised easier and more flexible contact with BT. The simple contact numbers of 150 for residential customers enquiries and 151 for residential customers 24 hour fault reporting service, and the 152 and 154 equivalents for business customers, were launched at this time.

BT launched a range of discount schemes for business customers called Customer Options in September. In return for a quarterly charge, businesses had the opportunity to make savings on directly dialled calls. A range of schemes was available, depending on the size of the customer's bill. They included Option 40 (£8 per quarter charge, savings of between 8 and 11 per cent), Option 50 (£300 quarterly charge, savings of between 10 and 12.4 per cent) and Option 70 (£600 quarterly charge, savings of between 11 and 13.3 per cent).

Option 15, a scheme aimed at residential customers, was launched in January the following year.

The Business Choices range of discount schemes  largely replaced the Customer Options range, with the exception of Option 15.

The introduction of a new user-friendly public payphone was announced on 11 October. It offered customers the choice of three payment methods in a single model - coins, BT Phonecards and credit cards. These multi-payment payphones were brought into service in 1992.

The Government made available 1,598 million ordinary BT shares (25.6 per cent of ordinary issued shares) for purchase in a second flotation (BT2) on 21 November, amounting to around half of its holding of 47.6 per cent of shares in the company) which remained from the original 1984 flotation. The sale raised over £5 billion for the Government, reducing its stake to 1,343 million shares (21.8 per cent of ordinary issued shares) .

A third and final flotation followed in 1993.


The Putting Customers First programme was unveiled on 6 January in the North West of England. It was followed by national implementation on 30 March.

The programme aimed to transform customer perceptions of the company, and was based on a range of initiatives dealing with BT's responsiveness to its customers, value and quality of service. Related initiatives the previous year, such as the Customer Options range of call discounts schemes, the revised Customer Service Guarantee and the BT Commitment, preceded it.

A new transatlantic fibre optic cable (TAT 9) came into service linking the United States, Canada, the United Kingdom, France and Spain. The cable measured 9,000 kilometres in length and was able to carry the equivalent of 80,000-voice calls simultaneously, twice the capacity of TAT 8.

The TAT 10 transatlantic telephone cable was laid, linking the USA, Germany and Holland.

BT launched the Option 15 discount scheme in January of this year. The scheme originally entitled customers to up to a 10 per cent reduction in the cost of direct dialled local, regional, national and international calls for a charge of £4 per month. The scheme was aimed at customers who consistently spent more than £73 per quarter.

From 28 June 1995 Option 15 discounts, as with all BT's residential option packages, applied to calls made from any phone line at the same address, providing they appeared on the same bill.

From 1 October 1995, along with other BT discount schemes, the discount on calls to information and entertainment services, and calls made to mobile phones was reduced to 5 per cent. This recognised that BT retains only part of the revenue from these calls and passes a substantial portion on to the other companies which provide these services. However, Friends & Family customers could now include a mobile number as one of their nominated numbers for the first time , thereby gaining a reduction in call charges to a mobile phone which from 1 April 1996 was increased from 5 to 10 per cent.

BT reduced the quarterly fee for Option 15 from £4 to £3.39 from 1 July 1997. When combined with BT's free Friends & Family scheme, Option 15 gave savings of 20 per cent on calls to the nominated numbers. This was later increased to 21 per cent when the Option 15 discount was increased to 11 per cent.

From 1 November 1998, BT reduced the quarterly fee for Option 15 from £3.39 to £3.20. This represented a decrease of 5.6 per cent per quarter.

The "Get Through to Someone" advertising campaign ran from this year until 1994, featuring a series of real life occurrences, such as a college girl calling home.

Marine-Page was launched to provide a low-cost means of ship-to-shore paging and messaging service used to contact ships in the North Sea using medium frequency radio.

Videophone was demonstrated at the Ideal Home Exhibition in March, enabling customers to see as well as hear the person on the line. It became available to the public as the Relate 2000 later in the year.

BT completed the conversion of its 5,500 public payphones in Wales from their old livery in April, giving them a bilingual identity. The project was completed in under a year following a pledge made at Caernarfon in July 1991.

BT unveiled a multi-million pound investment programme for its Global Network Services (GNS). GNS was a portfolio of managed data network services, launched in 1990, which covered 107 countries and at this time was directly provided and supported by BT on an end-to-end basis in 23 countries. GNS and its portfolio were subsequently absorbed into the Concert joint venture company in 1994.

The investment programme in this year included a substantial geographical expansion of the Services, and the introduction of a new high speed Frame Relay connection for data applications, such as the interconnection of local area networks.

Frame Relay was a new data communications protocol, using new high-speed packet switching technology to handle data traffic with high peaks and requiring high volume throughput between a number of geographically dispersed sites, for example the interconnection of local area networks nationally and internationally. The new high speed frame relay connections allowed customers to transmit data at rates up to two million bits of information per second (2Mbit/s). This was a considerable improvement on the existing 56/64 Kbit/s transatlantic frame relay service already offered by BT, which was the first such service in the world.

A redesigned telephone bill was issued to customers nationally from October, setting all the information out in clearer, simpler terms and designed to reduce confusion over charges.

The 100,000th BT payphone was installed at Dunsop Bridge near Clitheroe in Lancashire. The site was chosen as being the village nearest to the centre of Great Britain.

BT ran the Sunday Special promotion during November and December. National direct dialled calls between 3pm and midnight on Sundays were charged at the local cheap rate.

BT established a network of 13 Malicious Calls Bureaux throughout the country, operated by teams of specially trained investigators who worked closely with the police. Concerned customers had only to ring one 0800 number to be put through automatically to the nearest bureau.

It was estimated at the time that 15 million malicious calls were made every year, one call in every 20,000. BT received 250,000 requests for help from customers receiving such calls before the Bureaux were introduced.

By 1997, and the fifth anniversary of setting up the Bureaux, BT had assisted more than 3 million customers who were being harassed by malicious calls.

One million customers had received advice or a leaflet from BT and a further 800,000 had their telephone number changed free of charge. Of the remaining 1.2 million cases, a quarter involved setting up tracing equipment at the request of the police, resulting in the source of more than six million individual calls being successfully identified.

A third of the cases with police involvement resulted in either a prosecution or a formal police caution. Since early 1996 the Bureaux had extended their work to handle malicious and hoax calls to the 999 operators and to the emergency services. In addition, there were growing numbers of cases where customers were called in error, particularly by wrongly programmed fax machines, modems or autodiallers. Some of these latter calls are made by equipment such as refrigeration units, traffic lights or boilers ringing a control centre to report an alarm situation. By tracing the source of the calls, the Bureaux not only ensured that the unwanted calls stopped, but that the company or organisation responsible for the equipment identified an error in what could have been potentially critical circumstances.

Making malicious calls is a criminal offence under Section 43 of the Telecommunications Act (1984). When the Malicious Calls Bureaux started, the maximum penalty was a fine of £400, later raised to £1,000. In 1995, the penalty on summary conviction was raised to a fine of up to £5,000 and - for the first time - a custodial sentence of up to six months was introduced.

In June 1997, the Protection from Harassment Act (1997) came into force and a person convicted under Section 2 of the Act henceforth faced a possible restraining order to prevent re-offending. Any subsequent breach of the restraining order could have resulted in imprisonment for a term of up to five years.

The Internet Society was chartered. This was the genesis of the World Wide Web.


Skyphone, a consortium comprising BT, Singapore Telecom and Norwegian Telecom, launched the world's first airborne fax service. Singapore International Airlines were the first to introduce the fax service on its fleet of Boeing 747s.

BT and MCI, the second largest carrier of long distance telecommunications services in the United States, announced a joint global alliance through a new international joint venture company in June, codenamed NewCo. The joint venture was launched as Concert Communications.

Virtually all the remaining shares in BT left to the Government from the first and second share offers were sold in BT3, a third flotation of Government owned shares in July 1993, raising £5 billion for the Treasury and introducing 750,000 new shareholders to the company.

Jetphone was introduced, a fully automatic air-to-ground digital terrestrial flight telecommunications system operating on a cellular principle designed to cover, initially, Western Europe. The system offered onboard voice, data and facsimile services to passengers and crew, providing access to both public switched telephone networks (PSTN) and private networks in more than 200 countries.

Mercury Communications launched its One-2-One mobile telephone service.

The National Weekend Rate, introduced in December, cut the cost of long distance calls by up to 60 per cent so that a three minute direct-dialled call to anywhere in the UK cost just 10p at any time on Saturdays and Sundays.

Different rates applied to national weekend calls using the operator, BT Chargecard or BT payphones.

BT created Syntegra in 1993 as its systems integration business to address the opportunity offered by the convergence of the worlds of IT, telecommunications and consulting. Syntegra helped its customers change the way they ran their businesses, advising on business processes combined with the latest IT and communication systems to give a competitive edge.

Typical customers were multinational corporations, major national organisations and communities of business partners. In 1999, Syntegra employed over 4,000 people, half of whom were based outside the UK doing business in over 50 countries, with customer centres in Europe, the USA, Hong Kong, Singapore and Tokyo, earning revenues of excess of £400 million per annum.

In December 1995 Syntegra acquired the French systems company, Europe Informatique, followed in April 1996 by the acquisition of the Dutch systems integration company, Rijinhaave. These takeovers were part of a programme of an expansion programme of acquisitions and alliances.

Syntegra was merged in May 1999 with BT's equally successful telecommunications outsourcing business, Syncordia  to form a new division, BT Solutions, to sit alongside the other recently created divisions, BT UK and BT Worldwide. BT Solutions combined complimentary skills of the previous two businesses under a single brand to meet all customer needs for integrated business solutions.


Peak call rates were abolished on 9 March and replaced by a new Daytime rate, operating Monday to Friday 8am to 6pm. For the first time since 1970, customers were able to make calls in the busy morning period without paying a premium. This was BT's biggest ever single price cut to date, saving customers an overall £350 million over a full year by making direct dialled calls to all UK destinations as cheap in the morning as they were in the afternoon.

BT introduced the Light User Scheme in February for customers who made few or no calls, but who might need a phone as a lifeline. The Scheme offered a rebate based on call bill size of up to more than 60 per cent of the line rental if no calls were made.

The maximum rebate, if no calls were made, was £16.38, reducing the quarterly rental charge to £10.24 - a saving of more than 60 per cent.

By 1998, when BT introduced the "no frills" BT In Contact service, more than three million customers had taken advantage of the Scheme, including many of those for whom the phone was a lifeline.

Directory enquiry charges for UK telephone numbers were reduced from 45p to 25p per enquiry on 1 September (see 1991 and 1998 entries).

The new National Long Distance Call charge band was introduced in September, abolishing the most expensive long distance charge rate and saving customers overall £244 million in a year.

BT launched a joint venture in Spain in April with Banco Santander as an equal partner. The new joint venture company was called BT Telecomunicaciones S.A. and offered managed network services in Spain, such as frame relay, Internet and virtual voice services.

BT took full control of the company by purchasing Banco Santander's 50 per cent shareholding in July 1997, by which time the company had developed a national network with an investment of 17,000 million Ptas. By then it had more than 1,000 corporate customers.

The last TXK crossbar exchange, at Droitwich, was withdrawn.

The British Approvals Board for Telecommunications (BABT) first issued its approval certificate for BT's bill metering systems, confirming that they meet BABT's stringent control requirements and Oftel's Standard for Public Telecommunications Operators' Meter Systems.

The certificate was renewed in February 1996 when BT remained the only telecommunications company in the UK to have received such approval.

BT's UK operation became the largest single organisation in the world to receive registration under the international quality standard ISO 9001.

This commitment to quality in all its activities was reaffirmed on 23 June when the UK's two leading independent quality auditors, The British Standards Institution (BSI) and Lloyd's Register Quality Assurance (LRQA), reissued BT with its Corporate ISO 9001 certificate.

This was the only certificate of its kind to be issued jointly by the two organisations, reflecting the huge range of BT activities that it covered. In effect, it was a summary of the 50 or so individual ISO 9000 certificates that had been granted to different parts of the business.

In 1996, the company was also a European Quality Award prize winner in its first year of entry.

Free fully itemised telephone bills were made available to residential customers to cover every single call.

The "It's Good to Talk" campaign was launched this year, featuring Bob Hoskins and the famous phrase, "It's Good to Talk". Directed by Hollywood's Ridley Scott, Hoskins appeared in 51 TV commercials, five voice-overs and 13 radio commercials until 1996.

BT announced in October that it had signed an agreement to sell its subsidiary, BT Marine Ltd, to Cable & Wireless (Marine) Ltd.

BT introduced the PremierLine discount scheme in June aimed at residential customers with call bills of £100 or more per quarter, although users could still benefit if their call bill fell as low as £40. The scheme entitled customers to;

  • a 15 per cent reduction in direct dialled local, regional, national and international calls.

  • a 10 per cent discount against basic rates on direct dialled calls, including BT Chargecard calls, to mobile or PCN phones, or to Information and Entertainment Services (previously known as Premium Rate Services).

  • 'TalkingPoints' which could be exchanged for free gifts from the PremierLine catalogue, or for AIR MILES at the rate of one AIR MILE award for every 10 points.

Customers received 500 free TalkingPoints when they joined, and one for each whole £1 that appeared on their phone bill (AIR MILES were no longer available for new customers to PremierLine from February 1999, although existing customers could continue to claim them for the duration of their PremierLine contract).

PremierLine cost £24 a year, initially payable annually, although from July 1 1996 it could be paid in four quarterly instalments of £6 each, with customers receiving monthly BT bills being able to pay in 12 monthly instalments of £2.

From 28 June 1995 PremierLine discounts, as with all BT's residential option packages, applied to calls made from any phone line at the same address, provided they appeared on the same bill.

From 1 October 1995, along with other BT discount schemes, the saving on calls to information and entertainment services, and calls made to mobile phones, was reduced to 5 per cent. This recognised that BT retained only part of the revenue from these calls and passed a substantial portion on to the other companies that provided these services. However, Friends & Family  customers could now include a mobile number as one of their nominated numbers for the first time, thereby gaining reduction in call charges to a mobile phone which from 1 April 1996 was increased from 5 to 10 per cent.

From 3 April 1997 PremierLine benefits were extended to include free membership of BT's Friends & Family Overseas discount package, which gave a discount of 10 per cent on calls to five international numbers. The improvement meant that PremierLine customers could enjoy combined discounts of 25 per cent off BT's basic call prices on their calls to up to six international numbers, and a total of 15 numbers in all if they were also on BT's free Friends & Family scheme. They could also receive the 15 per cent PremierLine discount on almost all their other calls (local, regional, national and international), all for the £6 per quarter PremierLine fee.

At the same time as the launch of PremierLine, BT announced the introduction of Business Choices, a discount package which offered five different levels of discounts for business lines in an office or site with combined direct dialled call bills of £75 or more per quarter.

The first such scheme of its kind in Europe, Business Choices offered savings for almost every kind of business on direct dialled calls. For UK direct dialled calls these were between 14 and 18 per cent on basic unit rate, depending on the Business Choices level adopted, plus an additional 3 per cent on most direct dialled international calls. Business Choices was a development of the Customer Options range of discount packages such as Option 40, Option 50 and Option 70, which it largely replaced. It was focused entirely on individual business sites, making the structure easier to understand.

The scheme was improved in June 1995 when the discounts available on direct dialled regional and national calls were increased by 3 per cent, bringing them into line with the discounts available for dialled international calls. By this time over half a million business customers were registered with the Business Choices level appropriate for the size of their phone bill.

The maximum saving possible was further increased with the introduction on 1 October 1996 of BT Business Connections, called Key Numbers from May 1996. This scheme gave a 5 per cent discount on direct dialled calls made to ten other numbers, and later a 10 per cent discount on an eleventh key contact number. It could be added to the discounts of up to 21 per cent available on Business Choices Levels 1 - 5, to provide a maximum possible 26 per cent saving on the qualifying calls.

In May 1996 BT announced a further series of enhancements to Business Choices to coincide with the launch of the discount package for very small businesses, BT Business Advantage. Overall, the improvements meant that the price of almost every call made by almost every UK business, no matter how small, could qualify for a tailored BT discount. The latest enhancements to Business Choices in particular meant that businesses were able to save between 27 per cent and 31 per cent on BT's basic regional, national and international call prices by the addition of a further 10 per cent to existing discount levels. They were also able to add 6 per cent to local call discounts, giving overall savings of between 20 per cent and 24 per cent. BT's Key Numbers discount package for customers' most frequently called numbers added another 5 per cent to the improved Business Choices savings for ten nominated numbers (and later a 10 per cent discount on an eleventh key contact number). Together, these schemes could have made total savings of up to 36 per cent possible on many calls. These improvements were estimated to save business customers £220 million a year, in addition to the £1.1 billion savings over the previous three years, including those for residential customers. This was the equivalent of a reduction of 18 per cent in the average business phone bill.

Yet more savings became possible for international calls with the launch of Key Countries discount scheme on 1 January 1998, and for UK calls with the launch on 1 April 1998 of the Key Cities and Key Regions schemes.

These schemes each gave a 15 per cent discount on business calls made up to ten nominated countries in the case of Key Countries, or on calls made to nominated cities or within the customer's own region respectively in the case of Key Cities and Key Regions.

These could be combined with other discount regions to make even more substantial savings. For example, Key Cities and Key Regions, when combined with Business Choices and Key Numbers, produced savings of up to 42 per cent. This meant that from 1 April 1998, for a business that already had BT Business Choices Level 1 and Key Numbers schemes, national daytime calls would have 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 introduced the Friends & Family discount scheme in February, aimed at residential customers. The scheme cost a single payment of £4.99 and entitled customers to a reduction of 5 per cent on any calls made to five selected numbers, one of which could be international.

Under Friends & Family Overseas, customers could also nominate up to five additional international numbers which received the 5 per cent Friends & Family discount, for a fee of £1 a quarter. It was free for PremierLine customers from April 1997.

From 28 June 1995, Friends & Family discounts applied to calls made using BT Chargecards to the five numbers nominated under the scheme and discounts from the packages applied to calls made from any phone line at the same address, providing they appeared on the same bill.

From 1 April 1996, a triple improvement was made to Friends & Family:

  • the discount was doubled to 10 per cent. This could be added to discounts of up to 15 per cent available on BT's other residential schemes, giving a possible 25 per cent saving on those calls.

  • The £4.99 joining fee was abolished at the same time.

  • Customers also had a sixth number, their own, added automatically to the scheme, extending the 10 per cent discount to calls they made home using a BT Chargecard.

The effect of these reductions, accompanied by extensive marketing, was to double membership of Friends & Family to five million in fewer than three months.

On 8 January 1997, by which time membership of Friends & Family had risen to nine million, BT announced that the numbers that could be nominated by customers under the scheme would be doubled to ten.

From 1 January 1998, BT introduced Friends & Family Country Calling Plans to give residential customers even bigger savings on calls to many countries. 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.

Also, from 1 May 1998, Friends & Family BestFriend was introduced, giving a 20 per cent reduction to one of the customer's ten specified numbers, in place of the usual ten per cent, so long as it was not an international or mobile number.

Friends & Family remained the leading and most flexible residential discount package at this time. Also available to BT ClickFree customers to reduce pay-as-you go Internet access charges, it could further be combined with other BT discount schemes to maximise savings. The most recent of these was BT Call & Save, announced on 5 January 1999. This scheme gave a 10 per cent discount on eligible calls to residential customers whose quarterly call bill was greater than £25. Eligible calls are direct dialled local, regional, national and international calls, including those calls made using a Chargecard and Ring Me Free card.

BT and MCI Communication Corporation launched Newco as Concert Communications Services in June, a $1 billion joint venture company. This alliance gave BT and MCI a global network for providing end-to-end connectivity for advanced business services. Concert was the first company to provide a single source, broad portfolio of global communications services for multinational customers, and was the first of the large carrier alliances to secure all regulatory and other approvals. As part of the alliance, BT acquired a 20 per cent holding in MCI. Under the terms of the joint venture MCI and its distributors marketed Concert services in the Americas, while BT and its distributors marketed Concert services in other parts of the world.

By November 1998 Concert had become the world's leading provider of seamless global transborder communications services and had more than 4,400 customers in 52 countries. Around 40 per cent of Fortune Global 500 companies used Concert services, accounting for nearly $2.75 billion in committed contract revenue. Concert services were available from 47 distributors worldwide. In 1999, the Concert network had 6,000 nodes deployed in more than 800 cities across more than 50 countries, representing 90 per cent of worldwide business.

Headquartered in Reston, Virginia, Concert Communications Services developed advanced networking services for BT and its distributors to market to global companies throughout the Americas, Europe and Asia.

The Concert portfolio of services was based on intelligent network technology, offering a single point of accountability and consistent and seamless products via a single globally managed network. Concert Frame Relay Service , Concert Managed Bandwidth Service, Concert Virtual Network Service , Concert Inbound Service (a global voice service for call centres) and Concert Packet Services (a managed global data network, also providing remote user access to large host or LAN-based systems, dial up service and remote access to applications and databases of information providers) were among the global solutions the Concert distributors delivered.

Following the completion of a merger agreement between Worldcom and MCI in September 1998, BT acquired from MCI its 24.9 per cent interest in Concert Communications for £607 million . Now that BT wholly owned Concert, work was undertaken to ensure that the group's business would be fully independent of MCI. The costs involved in this work were estimated at £150 million over the two years to March 2000.

Call Return and Caller Display were launched on 22 November as part of the portfolio of Select Services available to UK customers connected to digital exchanges. Select Services were marketed as early as January 1982 as Star Services following the opening of the first System X digital exchange at Woodbridge, Suffolk in 1981. They became more widely available as the network was progressively modernised, ultimately becoming almost universal when the network became fully digital in 1998. The full range currently includes:

Caller Display: first trialled in December 1992, Caller Display allowed customers to see the number of the person calling them before they answered the telephone. The number was shown on a special unit or phone incorporating a display unit which could be rented or bought.

Call Return: enabled customers to find the telephone number of the last person to call them by dialing "1471". It was decided to offer this facility free permanently as part of the celebrations marking BT's tenth anniversary. By the end of May 1996 all Call Return customers could enjoy an improved service which gave the time and date of the last call, as well as the number, which could be returned automatically by simply dialing "3".

Callers could prevent their numbers being forwarded by dialling "141" before the number they were calling. This did not prevent the tracing of malicious calls through BT's internal Malicious Call Identification system, which BT operated with the police.

By only March 1996, the introduction of these two services had led to a reduction of 20 per cent in the number of obscene, offensive and malicious calls in the UK. By the same time around 12 million BT customers used Call Return each week, making an average six million calls to the service every day, in addition to the two and a quarter million customers who used other Select Services regularly.

Charge Advice: a free service which gave the approximate cost of a call immediately after a customer made it.

Reminder Call: allowed a phone to be programmed to ring back at the desired time as an alarm or a reminder.

Call Waiting: allowed customers to accept another incoming call while they are already speaking on the phone.

Three Way Calling: allowed a third person to join in a phone conversation, enabling customers to set up their own conference calls.

Call Diversion: diverted incoming calls to virtually any other telephone, including a mobile phone. The caller was charged only for their call to the customer's phone, and the customer paid for the diverted call to its new destination.

Call Barring: allowed customers to bar incoming calls from some types of numbers when they did not wish to be disturbed, and to bar all outgoing calls selectively, or calls to just certain other numbers such as international calls, in order to control their bill.

Call Minder: launched in May 1995, it provided customers with their own personal answering service from within the BT phone exchange. It replaced the usual telephone answering machine, and could record up to 30 incoming messages for customers even when they were using their own phone.

Call Sign: a new service launched in December 1998 and aimed at busy households, homeworkers, and small businesses. At a cost of £5 per quarter, BT Call Sign provided customers with an additional phone number on their existing line, which rang with a distinctive sound when called. They would know before answering the phone whether it was, for example, a personal or business call, a call for a different member of the family or for a flatmate. Other uses of BT Call Sign included the ability to identify between a fax or telephone call on the same line or the addition of a new number for customers with more than one business.

The BT Call Sign number could be listed in the local residential or business phone book.

BT and MCI launched Concert Virtual Network Service (Concert VNS) in November. Concert VNS was an advanced international virtual private network aimed at multi-national companies, and was the first such service to be launched. It enabled companies to establish seamless voice and data links between countries where the service was available. Customers could have access to features such as short code dialing, card services and faster call set up, normally available only on a private network. Concert VNS was based on intelligent network technology, which used centralised databases to control and manage calls across the network. It eliminated fixed costs and operational requirements associated with privately owned international networks, and featured a one-stop shop for installation, service and billing. Customers could call multilingual global customer service centres 24 hours a day seven days a week and could be billed for all global services in a choice of currencies and languages.

The service was swiftly expanded geographically to cover more countries, and a second generation of VNS value added features was launched in October 1995. This included Concert Audioconferencing (global private audio conference calls), Concert VNS Calling Card (cost efficient long distance calls when out of the office via either private or public dialing plans), Concert Remote Access (freedom from dedicated access to Concert VNS) and Concert Switched 656/64 Service (targeted at growing videoconferencing and document sharing applications). By May 1997, over 100 multinational customers had chosen the service to meet their global needs, including Unilever and Ford.

Internet use exploded this year. The first cyberbank, First Virtual, opened on the Internet, and in the USA Pizza Hut offered on-line pizza ordering through its Web page. Recognising the Internet's potential, BT launched BTnet, its Internet access service aimed at business customers and resellers, in December. BT provided connectivity via a high-speed transatlantic link to the United States, and to Europe through membership of EBONE (European Backbone). From November 1995, Internet Service Providers, resellers and Corporate Users were able to access BTnet via Concert Frame Relay Service. This service was later being used by around 50 ISPs and was available in Belgium, France, Germany, Netherlands, Spain, Switzerland and South Africa. BT later launched BT Internet, BT Click+ and BT ClickFree, Internet services aimed at residential customers and smaller businesses.


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.


Sir Peter Bonfield, the former Chairman of ICL, joined BT as Chief Executive on 2 January. He took up his post after the announcement the previous November that Sir Iain Vallance would be splitting the roles of Chairman and Chief Executive. Sir Iain continued as Chairman of BT. Sir Peter, knighted in the 1996 New Years Honours for services to information technology, promised a "roller coaster ride" for BT people as BT continued its global expansion. Sir Iain subsequently became part time Chairman from 31 July 1998.

During January and February, BT abolished the reconnection charge for residential customers at premises which still had all the phone wiring intact although service had been switched off at the BT exchange. This was a successful promotion which was taken up by over 82,000 households.

From 1 April 1999, BT scrapped the £9.99 reconnection charge for residential customers altogether. Taking over an existing BT residential line was now free, even if there was a break in service, so long as the old wiring was still in place.

Between May and July, BT ran a scheme for business customers which gave them the chance of a second phone line for half the usual price. The special offer applied to the second business line provided to customers at the same address, and covered installations made between 1 May 1 and 31 July this year. During this period customers could have the second line installed for just £49.50 instead of £99.

This offer was repeated for both business and residential customers in 1999. Between 1 April and 30 June 1999, residential customers could have a second exchange line installed for £49.50, instead of £99 incl. VAT. Business customers paid £49.50 excl. VAT, instead of £99 for an additional line.

Over the same period customers could also get connected to BT Highway and ISDN2 at half the usual price. The special offer of £50 (excluding VAT) off connection or conversion on all pricing options meant that customers taking the most popular options with inclusive calls would pay half the normal conversion charge.

BT added its pricing discount schemes with the introduction of the Corporate Choices package, which allowed discounts of up to 22.5 per cent for larger business customers. Corporate Choices benefited companies which operate over several sites with phone bills of more than £400,000 a year.

There was a £6,000 annual fee for Corporate Choices in addition to the relevant quarterly site fee. Corporate Choices replaced and improved upon Tiers 1 to 3 of the Business Choices 2000 Series of discount packages through a combination of bigger discounts and lower entry fees.

BT and its Globetel consortium partners announced in February the formation of a new company in Israel called Newtone - The Israeli Company For International Telecommunications Ltd. Trading as Newtone, the company was a joint venture between BT, MCI, and three Israeli partners; Tadiran Ltd. (Tadiran), Idan Software Industries I.S.I. Ltd. (Idan) and Darcom Ltd. (Darcom). It was to tender for one of two licences for international telecommunications services in Israel. The joint venture shareholding was BT 25 per cent, MCI 15 per cent and the three Israeli partners 20 per cent each.

BT launched its mass market Internet service on 29 March - BT Internet - announced on 26 February. It was aimed at residential and small business customers, as well as users new to the Internet. A full range of Internet services was offered, including world-wide electronic mail, file transfer, and access to vast quantities of information through the World Wide Web and discussion groups. Features included in BT's unlimited monthly service were five free e-mail boxes as standard, 2.5Mb of free Web space, and fast connection through 33.6 Kbps modems at local call rates.

BT Internet was competitively priced with a one off registration of £20 (incl VAT) and a flat monthly subscription fee of £15 giving unlimited use of all BT Internet services and applications. Alternatively, customers could pay an annual subscription fee of £150 giving them a discount of 16 per cent. BT Internet billed customers directly for their subscription only. Calls to service were charged at local rate throughout the UK and billed separately as part of the customer's regular phone bill.

BTnet, the Internet access service aimed and business customers and resellers continued to be available.

On 3 May, BT announced unlimited ISDN access to BT Internet at a monthly subscription of £23.50. This package was aimed at users who wanted faster access to stills, video clips and sounds found on the Web, but who found response times using conventional modems then available too slow. Such users included schools and universities, and teleworkers, and now had access to the Internet at a speed of 64kbps, more than twice the speed of the fastest modem connection then available.

Charges were reduced by over 20 per cent in January 1997; the one off registration charge of £20 was abolished, and the monthly subscription was reduced to £11.75.

The ISDN access option was halved at the same time to £11.75, and the subscription to customers who paid annually reduced to £129.25, equivalent to one month free.

In 1998 BT launched a pay-as-you-go service called BT Click for less frequent Internet users, followed by BT ClickFree in February 1999.

BT launched Business Connections on 7 May, a nationwide sales and support team dedicated to helping the UK's growing businesses to get the best out of their phones and to exploit the advantages of new telecoms technology. At the centre of BT Business Connections was a new, universal, free phone helpline - 0800 800 800, replacing "152" for all business customer enquiries. BT Business Connections provided expert advice and assistance for business customers who wanted to know more about any aspect of their telecommunications. Advice covered what was new in the world of computers, telephones, and information technology, to BT's range of price discount schemes that cut their phone bills.

BT acquired Bell Canada's 25 per cent stake in Clear Communications, New Zealand's second largest telecommunications company. BT joined existing shareholders MCI, Television New Zealand and Todd Corporation as an equal 25 per cent shareholder in the company.

BT appointed Global TeleSystems Group (GTS) in May as its distributor of Concert Services in the Czech Republic.

GTS CzechCom was a subsidiary of Global TeleSystems Group Inc. (GTS) of the US. The GTS Group operated in markets throughout Europe and Asia, with 18 businesses worldwide in 1996, and principal offices in Monaco, Brussels, Moscow, Beijing and Budapest. The company at that time operated the largest private VSAT (very small aperture) satellite network in Central and Eastern Europe.

It provided network and service solutions to government, commercial and telecommunications carriers using satellite, microwave, radio and fibre technologies.

BT launched its high-speed CellStream service - the UK's first national ATM (Asynchronous Transfer Mode) service.

ATM was a key technology for future integrated multi-service communications as it was designed to handle, in a flexible, cost effective and scaleable manner, large volumes of Internet (IP) traffic and multimedia applications which were a mix of voice, data and image.

BT announced a programme to provide free conversion to modern plug and socket connections for customers who still rented phones with permanent direct wiring. The normal £29.38 conversion fee was waived during a special six-month offer from 16 September.

This promotion was aimed specifically at customers who still had direct wired phones, and as a consequence could not choose to buy or rent modern phones which provide access to newer services such as Caller Display, Call Waiting and Call Divert. Most telephones and accessories designed to meet the needs of customers with physical disabilities or sight and hearing impairments also require plug and socket connections. They include telephones with large buttons and inductive loop hearing assistance. Modern plug and socket connections also enable customers to join community alarm schemes for the elderly and those with disabilities.

BT already subsidised the price for plug and socket conversions by about £20 before this promotion. It also provides plug and socket connections free when a direct wired phone needs repair. Free conversion continued for vulnerable customers after the end of the special offer period. BT worked with Oftel and other representative consumer organisations to define which customers would be eligible.

Exchange line rentals from July 1 increased to £25.69 per quarter for residential customers, and £41.13 (£35 ex VAT) for businesses. The rental changes amounted to an increase of 3.7 per cent for residential customers and 2.4 per cent for businesses, and were below the 3.9 per cent increase to the Retail Price Index since they were previously last reviewed in February, 1995, when they had risen by 4.6 per cent. The latest increases amounted to less than 1p a day.

BT promised that no customer's bill would l increase by more than the current annual rate of inflation - 2.4 per cent in April 1996 - even with the new rental changes.

BT unveiled a new design for its public phoneboxes in July, following extensive research into customers' opinions. The new phonebox, designated the KX+ range and the first design for more than 10 years, was less angular, with a curved roof, and contained a small seat and a shelf for writing or placing a bag.

Other features were a lower handle on the outside of the door to help customers with disabilities and a new closing mechanism to make the door more robust. Payphone equipment inside took cash, phonecards, credit cards and chargecards, with these payment options clearly written on the outside of the box rather than using red or green colour coding which was the current practice.

Research for BT Payphones revealed widespread appreciation of the availability, maintenance and reliability of the existing payphones and the standards to which

they were maintained. Despite liking certain features of the stainless steel designs introduced from the 1980s, such as the fact that they were lighter, more airy and more accessible for people with disabilities than the traditional style, customers felt that there was still room for improvement. Popular opinion was that the square shape seemed clinical and that something softer and more rounded would be preferable. The colour of the phonebox itself, particularly the roof, had to satisfy a number of requirements, in particular it had to be practical to keep clean and bright enough for customers with visual impairments.

After a number of experiments, red proved to be the colour that best met the required criteria, with the added advantage that it reflected something of the character of the traditional red K6 kiosk designed by Sir Giles Gilbert Scott in the 1930s.

The new design resulted from collaboration between GKN, who manufactured the existing style of payphone, and the design agency DCA. It was also extremely cost effective to produce, as it used the same basic carcass as the existing payphone housing.

The first of the new look phoneboxes appeared on the streets in the early autumn, with approximately 5,000 installed over the next year.

BT and News International announced plans in September to launch Springboard Internet Services Ltd. (SISL) – a 50:50 joint venture company between BT and News International Ltd. providing an Internet service designed for the UK mass consumer market. LineOne, the brand name given to the service, delivered entertainment, information, home shopping and education to UK homes via the Internet.

Launched in January 1997, LineOne provided fast and easy access to content drawn from major News International and News Corporation brands, such as The Times, The Sunday Times, The Sun and the News of the World.

A strategic collaboration with Microsoft was announced in August under which customers of BT's mass market dial-up Internet service - BT Internet - would be offered Internet Explorer 3.0, then the latest Internet browser from Microsoft.

BT introduced the International Weekend Rate on 7 September, cutting between five and 23 per cent off international calls made between midnight Friday and midnight Sunday.

BT had reduced its main prices by £1.3 billion over the previous three years and was committed to cutting at least £300 million more off prices over the next 12 months.

International weekend rate savings included:

BT's international Weekend Rate runs from midnight, Friday to midnight, Sunday. International calls made at weekends previously cost the same as those made during weekday evenings and at night-time. The Weekend Rate was not to apply to international calls made from BT public payphones or with BT Chargecards, to international ISDN and 0800 calls, or to INMARSAT and maritime services.

Further international call reductions were introduced to many daytime, evening and weekend calls on some of BT's most popular routes from 8 October.

These new cuts were all in addition to the ones introduced on 7 September when BT introduced the International Weekend Rate, and included:

Combined with BT's new International Weekend rate, these reductions meant that the cost of a call to the USA or Canada on a Saturday or Sunday had fallen by 31 per cent since the beginning of September 1996. Weekend calls to Australia or New Zealand had come down by 24 per cent overall during the same period.

BT cut national evening and night-time call charges by 20 per cent - from 5.9p a minute to 4.7p - from 8 October. At the same time, national daytime calls were cut by 10 per cent. Together with the reductions in international calls introduced at the same time, this resulted in a further £214 savings, bringing total price cuts to more than £1.5 billion in three years.

This was followed by a further 10 per cent cut to national daytime calls and a 3.8 per cent cut to regional daytime calls on 29 May 1997, also simplifying charging by creating a new single rate for all long distance UK daytime calls. In the past 18 months BT had also cut the cost of calls to every country in the world - some by up to 44 per cent.

BT went on to reduce the cost of national calls made during weekday evenings and nights by a further 10 per cent from 1 October 1997; in total a 28 per cent cut in a year. This meant that the cost of these calls came down from 4.7p a minute to just 4.2p.

At the same time, BT reduced the cost of daytime calls made to Cellnet and Vodafone cellular phones by 12 per cent - from 36.5p a minute to 32p - reflecting reductions in payments which BT made to the two mobile operators. BT charged by the second, and there was a 5p minimum charge for all calls.

Overall, BT's price cuts over the four years to 1997 meant that the average residential call bill came down by 32 per cent in real terms, while the average business call bill came down by 35 per cent.

Further cuts were introduced on 17 January 1998 when BT cut 10 per cent off the cost of long distance calls made within the UK at weekends. 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.

BT and NS (Nederlands Spoorwegen) - the Dutch national railway network operator - celebrated the launch in September of their joint venture company in the Netherlands, formed in March the same year. The new company, called Telfort, B.V. was created to address the Dutch business community, and was jointly owned 50-50 by BT and NS.

Headquartered in Amsterdam, Telfort initially offered data, corporate voice and virtual private networks, as well as international voice and data services from Concert Communications Services. The company also offered management and outsourcing services.

Plans for Telfort to address the Dutch residential and mobile markets were also developed, with the firm intention of positioning the joint venture as the alternative telecommunications company in the Netherlands.

It was awarded a fixed licence in November 1997, and on 26 February 1998 the Dutch Government also awarded a mobile licence to Telfort. The award was for a national DCS 1800 mobile licence and was the result of a Government-conducted auction. Together with the fixed licence awarded the previous year, the mobile licence now enabled the company to develop integrated communications solutions tailored to the Dutch residential and business markets.

From 23 September, three pricing options were available to customers of ISDN 2 - BT's high speed digital communications service aimed at small to medium sized businesses, or branch offices of larger organisations - which had been launched five years previously.

Start Up was packaged for first-time users who, for a lower connection fee of £199 and higher rental, would receive a yearly call allowance of £90 for two years, and £210 a year thereafter. By spreading the cost over two years, businesses could save up to 14.5 per cent in the first year on previous ISDN 2 prices.

Fast Start was aimed at customers with experience of ISDN and others who were confident of their usage rates. For a connection fee of £680 and rental of £130 per quarter, Fast Start gave them a call allowance of £650 for the first year and £210 a year thereafter. This was a 25 per cent saving on previous ISDN 2 prices in the first year.

Low Start was targeted at low users or customers who used ISDN to provide back up for private circuit services. The connection charge remained unchanged, but rental was increased.

Existing customers could switch to the new Standard rental option comprising a quarterly rental of £130 and an annual call allowance of £210 per annum, saving more than eight per cent on previous ISDN 2 prices.

The introduction of call allowances made it easier for businesses to try out new and innovative applications. They complemented the on-going reduction of BT data call prices which had been reduced by more than 26 per cent in the previous three years and were among the cheapest in the world.

UK ISDN calls were priced at the same rates as normal telephony and all normal discounts applied. Consequently, ISDN users could save up to 31 per cent on BT's basic, regional, national and international call prices with its recently improved range of Business Choices packages. Customers could obtain an additional five per cent saving on 10 direct dialled calls with Key Numbers for an initial subscription charge of £10 (this fee was waived from 1 April 1999).

Customers could also take advantage of long term discounts for both ISDN 2 and ISDN 30 services, which were introduced on 1 January 1995. Companies which opted for three, four or five year contracts benefited from discounts on rental charges ranging from three, seven and ten per cent respectively.

Following concerns expressed by Oftel over potential difficulties to competitors, the pricing structure was amended from 3 October, whilst retaining its innovative features, benefits and customer choice;

The Start Up connection charge was unchanged at £199. The rental charge rose by £15 per year, offset by increases to the inclusive call allowance of £15 for each of the first two years and £20 thereafter.

The Fast Start connection charge fell to £500, the rental rose by £15 and call allowance fell to £355 in the first year and changes to £230 per year thereafter.

The Low Start connection charge remained unchanged, but the rental charge fell to £352 per year.

Eighteen of Europe's network operators formed a consortium to work on further research and development into ATM (Asynchronous Transfer Mode) technology and to continue experiments of advanced high-speed services and applications. Known as 'JAMES' (Joint ATM Experiment on European Services), it built on the success of the European ATM pilot which ran from July 1994 and December 1995.

ATM was the key enabling technology for future integrated broadband communications as it was designed to handle multimedia applications which are a mix of voice, data and image.

BT and New World in October announced that they had reached an agreement that ensured that customers had the benefit of both New World's new red livery phone box and BT's phone boxes throughout the country.

Earlier in the summer, BT had obtained an injunction to stop their competitors, New World Payphones, from using the old-style phone boxes designed by Sir Giles Gilbert Scott, the K2 and K6. New World wanted to put the old style phone boxes up in parts of London where the local planning authorities wanted to compel the installation of old style phone boxes at new sites.

Part of the agreement was that BT woul make available to NWP sites where BT's modern kiosk was already installed, so that planning authorities requirements did not prevent the public taking advantage of New World's service in the key tourist areas. At the same time, BT had the sole right to install the old phone box when appropriate.

Oftel's Advisory Committee on Telecommunications for Disabled and Elderly (DIEL) supported the action by the two telephone companies, pointing out that, although the traditional boxes may be pleasing to the eye, they can present problems to customers with disabilties.

BT launched Concert Packet Services in Greece in October and appointed Space Hellas SA as distributor.

This strategic alliance between BT and MCI progressed further with the announcement on 3 November 1996 that they had entered into a merger agreement to create a global telecommunications company called Concert plc, to be incorporated in the UK with headquarters in both London and Washington DC.

The merger with MCI would give BT's shareholders more exposure to the United States, the world's largest and most dynamic marketplace, together with the growth momentum and market expertise of MCI, known for its success in the competitive US long distance market. By combining with BT, MCI would gain access to BT's technical expertise in the provision of local market products and services, and the substantial financial resources and global position of BT.

The merger proposals subsequently met with approval from the European Commission, the US Department of Justice and the US Federal Communications Commission.

Nevertheless, BT ultimately decided on 9 November 1997 to sell its stake in MCI to the US company Worldcom for $7 billion or $51 per share. 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.

Following the completion of the MCI-WorldCom merger on September 15, 1998, BT sold its 20 per cent holding in MCI to WorldCom. The proceeds totalled £4,159 million on which an exceptional pre-tax profit of £1,133 million was realised. In addition, BT had received a further $465 million severance fee on 12 November 1997 for the break up of the proposed merger. The settlement was hailed as an excellent deal, with immediate benefits to customers and investors.

Also following the completion of the Worldcom and MCI merger agreement in September 1998, BT acquired from MCI its 24.9 per cent interest in Concert Communications for £607 million. Now that Concert was wholly owned by BT, work was undertaken to ensure that the group's business would be fully independent of MCI. The costs involved in this work were estimated at £150 million over the next two years to March 2000.

BT was chosen as the prime contractor in November to work with the Ministry of Defence on an advanced national fixed telecommunications network for the UK armed forces.

The Defence Fixed Telecommunications System (DFTS) contract, worth an estimated £1 billion over ten years, was to deliver voice, data, LAN interconnect and other wide area networking services for the Navy, Army and Air Force. The integrated service was to be designed to improve inter-operability, resilience and operational effectiveness while cutting the MoD's ongoing costs.

BT's solution for DFTS harnessed the principles of the Government's Private Finance Initiative (PFI), and applied these for the first time in a telecommunications context. BT would have responsibility for the design, financing, operation and ongoing management of all DFTS services, giving guaranteed levels of performance and ensuring technology updates to let the MoD benefit from new developments.

BT and Tele Danmark were selected in December as the international partners for Newtelco which intended to become Switzerland's second licenced operator.

The Swiss founding companies of Newtelco were Schweizerische Bundesbahnen (the Swiss Federal Railways), Migros-Genossenschafts-Bund (the largest retailer in Switzerland), and Union Bank of Switzerland (the leading Swiss bank). BT and Tele Danmark would hold a significant minority stake, with the Swiss sponsors retaining the majority.

The agreement extended Tele Danmark's relationship with BT. Together with Telenor, the two companies had previously launched a joint venture, Telenordia, in Sweden. Tele Danmark were also distributors of Concert Services in Denmark.

Headquartered in Zürich, Newtelco planned to offer liberalised communications services in voice, data and multimedia services. Newtelco used the rights of way and fibre optic network of the Swiss Federal Railways as the backbone for its telecommunications network.

BT ran a "three for the price of two" twelve day Christmas and New Year phone call sale for its 20.5 million residential customers.

Promoted as the Seasonal Saver, this special offer applied to BT's regional and national longer-distance UK calls which were dialled direct from BT residential phone lines. It ran from Boxing Day until midnight on 6 January 1997.

Every third minute of a qualifying phone call during this period was free; after two minutes under the Seasonal Saver BT gave customers the third minute - or part of a minute - free. There was no time limit on calls, so the sixth minute, ninth minute, twelfth minute, and so forth, were all free.


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.


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.


During 1999 BT began installing 1,000 multimedia payphones using touch screen technology and full interactive screen display to give users fast and easy access to email and the Internet with a range of interactive features.

February saw the launch of BT ClickFree, a free no-registration UK Internet service, allowing customers to access the Internet at the cost of a local call.

The reconnection charge for residential customers was abolished in April 1999, enabling customers rejoining BT from a competitor to do so free of charge. At the same time, the cost of installing a new residential line was cut by 15%.

Autumn 1999 saw the launch of Open, a joint venture between BT and BSkyB and others to provide interactive services through digital satellite television, reaching 2.8 million homes in 2000.

In November 1999 BT acquired Securior's 40% interest in Cellnet for £3.17 billion.  The same month BT Cellnet made the world's first GPRS (general packet radio services) data transfer call.

Yellow Pages won the European Quality Award and becomes the first BT business to win the Award outright. BT Northern Ireland was also a prize winner and BT Payphones a finalist, making BT the first company ever to have three units selected as finalists for the award.

BT was also recognised in the British Diversity Awards, receiving a Gold Standard Award for its Ethnic Minority Network; was shortlisted for a 1999 Opportunity Now Award and achieved re-recognition as a Corporate Investor in People at its first annual review.  Internally, BT introduced its Valuing Difference Awards to recognise and celebrate individuals and teams who are seen as role models in valuing diversity.

In this year BT acquired Control Data Systems (later known as Syntegra USA) for £213 million.  With AT&T BT expanded its worldwide presence acquiring interests, in August, Rogers Cantel Mobile Communications and AT&T Canada for a total of £660 million), and in September a 30% share of Japan Telecom for around £1.2 billion. Yell acquired Yell Books USA for £415 million (US$665 million). Whilst BT Cellnet purchased BT Cellnet Lumina (formerly Martin Dawes Telecommunications).


BT marked the new millennium with BT FutureTalk. As well as BT's sponsorship of the Talk zone at the Millennium Dome, Greenwich, BT joined with the BBC to support FutureWorld ,a touring exhibition of the UK showing dramatic demonstrations of the digital age, and the BT FutureTalk in Education programme was a drama-based campaign helping children improve their communication skills which reached 3,500 UK schools by July 2001.

5 January 2000 saw the launch of Concert, BT's global joint (50/50) venture with AT&T, and trans-border assets and operations were transferred to Concert.

Modification to BT's Licence in April allowed for local loop unbundling (LLU). This meant other telecommunications operators would, from December, be able to use BT's copper local loops (the connection between the customer's premises and the exchange) to connect directly with their customers.

BT obtained a licence (for £4.03 billion) to operate 3G mobile services in April and in November entered into an agreement with Crown Castle UK to provide infrastructure to 3G mobile and wireless operators.

A restructured BT was announced on 13 April, separating the UK fixed-network business into wholesale (fixed network assets) and retail (customers' needs and accounts) divisions. Other assets in the UK, Europe and elsewhere were regrouped by market sector rather than geographically: Ignite (international broadband internet protocol (IP)/network business); BTopenworld (international, mass-market internet business);  BT Wireless (international mobile business) and Yell (international directories) alongside Concert.

BT's low-cost internet access service SurfTime was launched in June offering unlimited internet calls for a fixed fee and attacted 446,000 customers in 2001.

June also saw the launch of BT's first DSL (Digital Subscriber Line) -based services and BT Cellnet's GPRS (General Packet Radio Services) services.

On 1 August 2000 e-peopleserve, a joint venture between BT and Accenture, was launched to deliver end-to-end e-enabled integrated global human resources services to large organisations. e-peopleserve secured five year contract to deliver transactional services to BT, one of the largest HR outsourcing contracts in the world.

In November BT's mobile internet portal Genie launched the UK's first exclusively online mobile service, offering mobile phones with mobile internet access through text messaging and WAP.

In the financial year ending 2000 BT was presented with the Business in the Community Company of the Year Award; achieved certification of ISO14001; the international environmental management system won the Impact on Society award for its UK community programme; and was top of the FTSE100 companies in the Business in the Environment's annual index of environmental engagement.

During 2000 BT acquired control of Esat Telecom Group (Republic of Ireland) for approximately £1.5 billion (March) and Telfort (Netherlands) for £1.21 billion (June). BT Cellnet purchased the 60% of The Mobile Phone Store that it did not already own for £45 million (April).


Sir Iain Vallance handed over the chairmanship of BT to Sir Christopher Bland on 1 May and stepped down from the BT Board.

On 10 May BT announced a three for ten rights issue at 300 pence per share. The opportunity was well supported by shareholders and became the largest ever rights issue in UK corporate history with 1.98 billion new shares issued and £5.9 billion raised.

BT sold Yell Group, the international directories and e-commerce business started in 1966 with the launch of Yellow Pages classified directory in Brighton, on 22 June for approx £2 billion.

BT Answer 1571, a free answering service for all its residential customers was launched in July and more than five million customers signed up in the first eight months.

Using Rate Adaption, or Extended Reach, technology BT launched an enhanced ADSL (Asymetric Digital Subscriber Line, or Broadband) service in July. The new technology extended the working range from the host exchange from 3.5 km to 5.5 km. As a result, the typical availability on an ADSL enabled exchange rose from 70 per cent of connected customers to over 90 per cent.

On 19 September BT opened its 1000th broadband enabled exchange at Livingston, Scotland.

On 19 November BT Group plc was formed as the demerger of mm02 (formerly BT Wireless) was completed with shareholders receiving one BT Group plc share and one mm02 plc share for each existing British Telecommunications plc share. On demerger mm02 comprised BT's mobile activities in the UK (O2 UK, formerly BT Cellnet wholly owned since 10 November 2001), the Netherlands (Telfort Mobiel), Germany (Viag Interkom - wholly owned since February 2001) and the Republic of Ireland (O2 Communications, formerly known as Esat Digifone wholly owned since April 2001), Manx Telecom and Genie (BT's mobile internet portal). BT Group plc was principally structured through four lines of business: BT Retail, BT Wholesale, BT Ignite and BTopenworld focused around markets rather than geography.

1 Aprilsaw thelaunch of BTexact Technologies, a wholly-owned business comprising BT's engineering and technology research and development activities, based at the company's world-renowned BT laboratories at Martlesham, near Ipswich. BTexact Technologies' principal customers are the BT lines of business and alliance partners but for the first time BT's research and technology division will market and provide its services to organisations outside BT.

BT refocused on western Europe selling its interests in Rogers Wireless, Canada (June); Japan Telecom, J-Phone Communications and the J-Phone group companies (July); and Maxis Communications, Malaysia (November). The sale of interests in Spanish wireless operator Airtel M ›vil SA, Spain in June supported BT's concentration on core activities.


Ben Verwaayen joined BT as Chief Executive designate on 14 January. He became Chief Executive on the departure of his predecessor, Sir Peter Bonfield, on 1 February.

On 26 January BT successfully brought into service the world's first hybrid Next Generation Switch (NGS) at Ilford, Essex with Glasgow and Reading cut over in February and March. The new switches used Voice over Asynchronous Transfer Mode (VoATM) technology, and marked a major step in the ongoing transformation of the BT core network and ensuring IP readiness for the 21st Century Network (21CN).

In response to the considerable pressure experienced following the downturn in the global communications sector, the unwinding of Concert, BT's international joint venture with AT&T, was completed on 1 April. BT acquired substantially all of Concert's managed services network infrastructure in Europe, Africa, the Middle East and the Americas, as well as nearly all of the customer and supplier contracts originally contributed, giving BT direct control of its activities in the global communications market.

On 11 April BT announced its £6 million investment in Connected Earth, a showcase of the history of telecommunications, in which the company and its predecessors have played a central role since 1840s. As part of the initiative some 5,000 artefacts from BT's historical collection were distributed to a network of partner museums, improving access to information about telecommunications.

BT Broadband, a new broadband access service was launched in April. Trials and testing during the summer were followed by full availability from October, providing customers with "always-on", high-speed direct access to the internet over a single home phone line, facilitated by a simple plug-and-play setup that customers could install themselves.

On 24 June, following the Government's decision to give Public Access Wireless LAN (local area networks) the green light, BT Openzone was launched with hotspots at Heathrow's Hilton Hotel, BT Centre (London) and Adastral Park near Ipswich. By the end of 2002 there were 80 BT Openzone enabled areas.

A scheme aimed at increasing the spread of broadband provision began on 1 July. By enabling potential customers to register their interest in taking the service, BT announced ˜trigger points' (number required to make the work viable) for more than 300 exchanges previously not considered viable for broadband provision. The first exchange to reach its trigger point was Todmorden, Yorkshire, which had done so by 10 September. By January 2004, 1,000 exchanges had been upgraded with ADSL broadband as a result of 700,000 registrations through the scheme.

In November BT offered free internet service for a week in cities throughout the UK to mark the introduction of high speed broadband access to the largest public network of internet kiosks. The distinctive blue e-payphones , produced by BT in partnership with Marconi, offer full internet access, email and text messaging.

Phonecards ceased to be sold on 31 October. Introduced in 1981 annual sales of pre-paid phonecards peaked at £74 million in 1990-91 but by 2001 only three per cent of the 587 million BT payphone calls were made using phonecards.

In NovemberBT won ‚ 1 billion (seven year) contract to manage and develop Unilever's global communications infrastructure one of the largest outsourcing contracts in UK corporate history. BT Global Services supplied a range of voice, data and mobile services to Unilever with the majority of revenues coming from operations outside the UK.

In December, following the decision of the communications regulator Oftel to open up directory enquiry services to competition, BT launched its new directories operation accessed through a single number, 118 500. The prior acquisition of business finder directory services Scoot.com in August offered customers classified listings and other enhanced information services. The new number ran in parallel with the old 192 code until August 2003, when competition was introduced to the service and the old code ceased. The immediate effect of competition was a significant reduction in call volume.


In January York received the first delivery of a new format BT phone book containing a classified directory together with A-Z business and residential numbers. The national rollout of all 171 phone books in the new format was completed by October 2004.

Marchsaw thelaunch of BT Learning Centre, an online subscription service to enable parents and children to learn more effectively online.

On 7 AprilBT revealed its new ˜connected world' corporate identity developed for BT by Wolff Ollins. The identity, previously used for BTopenworld, replaced the piper emblem and was introduced alongside the branded values of trustworthy, helpful, straightforward, inspiring and heart.

In July BT began the implementation of Exchange Activate. Exchange Activate explored viable ways to roll-out broadband to smaller communities using lower-cost exchange technology from BT Wholesale, and a sponsoring organisation.

On 25 July The Communications Act came into force bringing in a new regulator, the Office of Communications (Ofcom) which did not assume its regulatory functions until 29 December, and a new regulatory framework. Under the new framework, the licensing regime was replaced by a general authorisation regime with the General Conditions of Entitlement (that is, conditions which apply to all) and specific conditions (that is, conditions which apply to individuals). A specific condition to BT is the Universal Service Obligation (USO) which designates BT as the supplier of universal service for the UK excluding the Hull area.

On 9 September BT announced its broadband services had reached exchanges serving four out of five UK homes, comparable to the number of homes connected to the mains gas network. Six days later the company announced it was installing BT Openzone access points in the first of its 108,000 payphones to bring wireless broadband to the streets of Britain.

In November BT launched the BT Diverse 5410, the UK's first enhanced messaging service home phone with all the benefits of digital cordless technology. Users could send and receive text messages and personalise their phones with ring tones and screensavers. The same month BT also showcased the BT Relate SMS, the UK's first corded phone capable of sending and receiving text messages and launched BT Mobile Home Plan, providing quick mobile phone calls to the home landline free of charge.

In December BT made the first move by a major UK player into the consumer VOIP (voice over Internet Protocol) market. BT Broadband Voice enabled cable broadband customers to make voice calls over the internet and in November 2004 the service was extended to small businesses with the introduction of BT Business Broadband Voice.

During 2003 BT sold its interests in Cegetek Group SA (January) and Inmarsat Ventures (December) and issued bonds worth £99 million exchangeable into BT's holdings in LG Telecom, Republic of Korea, shares (December).


In January BT offered its fastest-ever consumer internet service, a 1Mbit/s broadband service through BT Yahoo! Broadband. Available to customers living within 3.5 km of a broadband-enabled exchange around 75 per cent of existing broadband users.

BT sponsored Wireless Broadband Week 26 January - 1 February, offering seven days of free access to BT Openzone. Traffic in the network increase by 133 per cent.

BT trialled cash-dispensing phone boxes in March in a partnership between BT Payphones and Travelex UK. The red, white and blue kiosks had a cash machine on one side and a payphone on the other, and installation was focussed on those areas with no cash machines.

In the first quarter of 2004,BT became the first UK-based company to introduce Siebel CRM OnDemand to businesses in the UK, enabling SMEs and divisions of larger businesses to organise, manage and streamline their sales, marketing and customer service activity through a hosted environment.

BT began trials of Flexible Bandwidth in April, enabling users to increase bandwidth up to 2Mbit/s temporarily or permanently.

In April BT announced that it had joined forces with Microsoft to launch BT Connected & Complete, a one-stop shop IT and broadband solution giving small businesses access to regularly updated and individually tailored IT software and support that was previously only available to large customers.

Following two months of successful trials,BT announced in May plans to launch Project Bluephone the first step towards handset convergence with handsets that switch seamlessly between fixed and mobile networks (see fusion - 2005).

BT announced in May its plans to redesign and reduce the cost of its local loop unbundling (LLU) product to encourage investment in broadband infrastructure and promote innovation.

In 2004BT acquired Transcomm; the UK operations of NSB Retail Systems; and BIC Systems Group Limited. BT disposed of its 27.7 per cent stake in New Skies Satellites ( £24 million); its 11.9 per cent holding of StarHub ( £78 million); and its 15.8 per cent stake in Eytelstat ( £357 million).


In February Northern Ireland became the first UK region outside London to have all its exchanges enabled for broadband.

BT began the transfer of consumer and business customers to super-fast standard broadband, up to 2Mbit/s (four times faster than previous speeds) at no extra cost in February.

BT reached its target of five million broadband lines in April, one year ahead of schedule.

BT Fusion, the world's first combined mobile and fixed phone, was launched on 15 June. BT Fusion works just like a mobile phone when the customer is out and about, but switches automatically and seamlessly onto a BT Broadband line when they get home, combining the convenience and features of a mobile with fixed line prices and quality. In July BT chaired the inaugural meeting of the Fixed-Mobile Convergence Alliance, where BT and five other world-leading telecommunications operators worked to accelerate the development of Fixed-Mobile Convergence products and services.

Following the Telecommunications Strategic Review (TSR), BT signed legally-binding Undertakings with Ofcom on 22 September to help create a better regulatory framework for BT and the UK telecoms industry generally. The settlement, which followed Ofcom's acceptance of legally binding undertakings from BT, is based on the principle of focusing regulation only where it is needed and rolling it back elsewhere and included the creation of Openreach on 11 January 2006.

An online version of the phone book was launched in September [link to www.thephonebook.bt.com], providing advertisers at no extra cost with their listing included on the website as well as in the printed directory.

BT won the Most Admired Company Award community and environmental responsibility category. Awarded in December by Management Today and Mercer Human Resources, the company was judged by peer review from the UK's 220 largest companies. Chief executive Ben Verwaayen was also singled out for praise in the most admired leaders section.

In 2005 BT completed the acquisition of Infonet, rebranded BT Infonet ( £520 million); acquired the 74 per cent of Albacom that it did not already own (minimum £80 million); and completed the acquisition of Radianz ( £107 million). BT also completed the sale of its 4 per cent stake in Instelsat ( £65 million).


11 January was the first day of operation for Openreach, the new part of BT created to deliver installation and maintenance services on behalf of Britain's telephone and internet service providers. On 22 January, the Undertakings from which Openreach was created became legally enforceable. [?link back to 2005 - Undertakings]

Actor Tom Baker (former Dr Who and narrator of comedy series Little Britain) became the voice of BT Text - a new service which lets people send and receive text messages on their home phone, 31 January - 30 April, with every text message sent to a landline delivered as a spoken message by Tom. Text messages sent and received by landlines soared by 69 per cent in the first 24 hours. Tom's voice was re-introduced in December for a charity fundraising initiative with 2p from every message going to Shelter.

BT and Eckoh Technologies provided a round-the-clock, speech-driven data capture service on 14 February enabling poultry owners to register their details with the Department for Environment, Food and Rural Affairs (DEFRA). The Great Britain Poultry Register was instigated to boost Government and industry ability to effectively tackle potential outbreaks of avian flu.

On 7 March BT set up a free helpline for worried business customers who had been told by Cable & Wireless that they had 90 days in which to find a new supplier, as C&W focus activities on only 3,000 large business and government customers. BT offered those displaced businesses a dedicated team of advisors to understand their options and help them manage the unexpected requirement to move to another communications company with the minimum of hassle and disruption.

The Princess Royal officially opened a new extension to a facility used for testing military systems in March. BT was selected to design, build and operate the extension to the Land Systems Reference Centre (LSRC) at Blandford Camp on behalf of the Ministry of Defence (MoD).

BT's 8Mb broadband option was launched on 4 April with download speeds of up to 8Mb and upload speeds of up to 448Kb for no extra cost to the customer.

On 11 May BT Group announced a world first - its development of a mobile phone service with the same functionality as an office fixed-line phone.

On 17 May BT announced agreements with six cities to become wireless pioneers. People in Birmingham, Edinburgh, Leeds, Liverpool, Cardiff and Westminster would benefit from huge wireless networks. On the same day BT Openzone - BT's wireless broadband network offering was selected as the world's Best Service Provider at the prestigious Wireless Broadband Innovation (WBI) Awards.

In May 2006 Reading was the first area to receive the new look phone book. The restyled front cover was designed to make people more aware of its usefulness as a classified directory.

BT Home Hub was launched on 20 June. Designed to sit at the heart of the digital home, the Home Hub supports BT's full range of services including Total Broadband and Broadband Talk, connecting wirelessly to PCs and other broadband devices, and updating automatically.

Ofcom removed retail price controls on BT on 1 August. Control was imposed when BT was privatised in 1984 and the deregulation follows the conclusion of Ofcom's strategic review of telecommunications in September 2005 [?link] and a public consultation on the removal of retail price controls begun in March.

On 13 September BT signed a memorandum of understanding with China Netcom (CNC) to work together to provide communications services, especially broadcasting and media, for the Beijing Olympic Games in 2008.

On 28 November the 21st century network, 21CN, went live in Cardiff. The first live phone call in the UK over the world's most advanced next generation network was made by eleven-year-old Laura Wess, from Wick and Marcross Church in Wales Primary School in the Vale of Glamorgan.

BT Vision, the next generation television service was launched on 4 December, putting the viewer in control by combining the appeal of TV with the interactivity of broadband.

In 2006 BT completed the acquisition of Atlanet SpA, a Fiat subsidiary providing domestic telecommunications services to Fiat and other businesses; purchased dabs.com, one of the UK's leading internet retailers of IT and technology products; and announced a 50:50 equity joint venture between BT and KDDI, Japan's second largest full service telecoms operator.


In October 2007, BT launched the world's first international Wi-Fi voucher scheme, enabling cheaper and more predictable costs for travellers when abroad. The Openzone 500 vouchers offered Wi-Fi access across roaming partners in the US, Canada, Brazil, Argentina and Europe and Openzone access to hotels, airports and other hubs for an all-inclusive rate.

In May 2007 BT acquired Mumbai-based i2i Enterprise Pvt Ltd, which specialised in IP communications services for major Indian and global multinational companies.

i2i is a provider of enterprise telecommunications systems in the Indian market, and distributed BT Infonet's managed network services and products nationwide.

This acquisition underscores BT's commitment to India, one of the world's fastest growing IT and business process outsourcing markets.

In June 2007 BT acquired Comsat International – a provider of data communication services for corporations and public sector organisations in Latin America – through its parent company, CI Holding Corporation. Comsat International employed more than 700 professionals with in-depth knowledge of Latin American markets and provided services directly in 15 countries. It had a track record in the delivery of complex projects and the management of network solutions for enterprise, public sector and carrier customers.

In June 2007, BT announced a three-year partnership with the British Red Cross in support of disaster relief worldwide. BT was the first global communications services company ever to partner with the British Red Cross in this way. BT invested £100,000 a year to provide essential satellite, IT and GPS equipment. By funding a three-year programme, BT and the British Red Cross could ensure that the relevant equipment was in place so that relief could be deployed anywhere in the world as quickly as possible. This partnership built on BT's current support for disaster relief through DEC and was a natural extension of BT's own emergency response and civil resilience activities.

In 2007, BT launched 'Inspiring Young Minds', its first global development partnership with UNICEF to develop community projects to bring education, ICT (information and communications technology) and communications skills to disadvantaged children. BT committed to invest £1.5 million over three years with additional fundraising activities by BT people around the world.

Ten months' work by a CBI task force – chaired by BT CEO Ben Verwaayen and including 18 chairmen and CEOs from some of the UK's largest companies – resulted in the publication of a report, Climate change – everyone's business, in November 2007. The report concluded that all businesses have a responsibility to reduce their CO2 emissions and BT pledged to help fulfil the task force's commitments.

BT acquired the award winning internet service provider Plusnet, which offered lower priced broadband and voice services.

In November 2007 BT acquired the IT infrastructure division of CS Communication & Systemes – the French IT systems and network services provider. The division provided corporate and public sector clients with a range of services for building and maintaining IT infrastructures, including consulting, network integration, insourcing, outsourcing and data centre services.

BT acquired the online electrical and computer goods retailer dabs.com, and International Network Services (INS), the California-based global provider of IT consulting and software solutions.


In July 2008, BT announced plans to make Britain's biggest ever investment in a fibre-based super-fast broadband network. BT committed to spend spend £1.5bn making fibre based services available to around 40% of the UK's homes and businesses by 2012. It was one of the largest investments in fibre-based broadband ever undertaken in Europe.

This would deliver a range of services with top speeds of up to 100Mb, allowing customers simultaneously to run multiple bandwidth-hungry applications, such as high-definition movies, gaming, complex graphics and videos; all with greatly improved upload as well as download speeds.

The investment was later increased to £2.5 billion with the aim of making fibre services to 4m UK premises by the end of 2010, 10m premises by 2012 and a fibre roll-out to around two thirds of the UK by 2015, offering speeds of up to 100Mps. These targets were all met ahead of schedule. By May 2013 BT was bringing fibre broadband to an additional 120, 000 premises a week on average, and its fibre network passed more than 15m homes and businesses in both urban and rural areas.

The London Organising Committee of the Olympic Games and Paralympic Games (LOCOG) reinforced its vision of 'a Games for the Digital Age' by announcing in March 2008 that BT had become the latest Tier One partner of the London 2012 Olympic Games and Paralympic Games.. As the official communications services partner, BT would be responsible for providing the communications services supporting the Games.

In January 2008 BT completed the merger between BT Italia SpA and I.NET SpA. The merger followed the acquisition by BT of Etnoteam's 13.6% stake in I.NET and the subsequent public tender offer for the remaining shares in public hands in April 2007. BT Italia was Italy's leading supplier of communications solutions and services dedicated solely to business and public sector customers. I.NET was an acknowledged leader in security and business continuity solutions.

In February 2008, in partnership with Sony Computer Entertainment Europe, BT launched Go!Messenger, a wireless communications package for the PSP (PlayStation Portable) gaming device. Go!Messenger was based on technology invented in BT's research labs. It enabled PSP users to send video and voice calls and instant messages to each other using a new and intuitive screen keyboard when connected to wireless broadband at home, or to a public Wi-Fi hotspot, including BT Openzone, when on the move.

In March 2008, bt.yahoo was named best portal at the Internet Industry Awards.

BT acquired Frontline Technologies Corporation Ltd, one of the leading providers of end-to-end IT services in the Asia Pacific region. Frontline provided IT consulting, infrastructure services, systems integration and IT outsourcing to local, regional and multinational companies and had operations in China, Hong Kong, India, Indonesia, Malaysia, Singapore, the Philippines, Taiwan, Thailand and Vietnam. Its acquisition enhances BT's existing networked IT services capabilities in the region.

BT made calls to its customer service and helpdesks free. On 1 April 2008, 99% of the numbers to customer service and helpdesks with an 0845 or 0870 prefix were switched to free 0800 numbers. The other numbers were changed over the next few months.

In February 2008, BT made UK weekend fixed line call charges a thing of the past by extending free weekend calls to all Option 1 customers. For the first time, all 15 million BT households – the majority of British households – no longer had to pay for weekend calls.

BT Total Broadband Anywhere was launched in May 2008 as the UK's most complete broadband package. It offered customers the same BT Total Broadband experience that they received in the home while they were out and about with a BT ToGo phone. BT Total Broadband Anywhere customers could enjoy their home broadband services on the move – exchanging emails, making VoIP (voice over IP) calls and accessing social networking, shopping and entertainment sites.

BT joined forces with FON to develop a global wireless broadband access service at no extra cost to customers. BT FON gave every BT Total Broadband customer who agrees to share a small, secure section of their home broadband connection the chance to benefit outside the home from sharing the connection of another BT FON member, as well as using Openzone Wi-Fi hotspots. BT had more than 90,000 BT FON members in 2008.

BT launched BT Tradespace, an online trading community that brought businesses and individual sellers together with potential customers and partners. At 31 March 2008, there were over 65,000 members of the BT Tradespace community, and around 2,000 joining each week. In 2009 there were 338,000 members

In January 2008, BT started to take orders for 21CN Ethernet, a next generation wholesale Ethernet service and the first product to be delivered over the 21CN platform. 21CN Ethernet will offer up to ten times the bandwidth of the core MPLS network, delivering high-speed data connectivity to corporate customers and mobile operators.

Wholesale Broadband Connect, BT's next generation 21CN broadband service was introduced in April 2008, following trials with communication provider custoemrs. It offered customers average speeds of around 10Mb, guaranteed service level agreements, the ability to trade speed for stability, and enhanced line diagnostics. At 31 March 2009, less than a year after it was first introduced, this service was available from exchanges serving more than 10m homes and businesses, around 40% of the UK addressable market.

BT launched BT Communications Complete, a simple networked IP platform for business customers to improve their communications.

Ian Livingston, formerly Group Finance Director from 2002 and CEO Retail from 2005, became Chief Executive of the BT Group on 1 June 2008.

In June 2008, BT announced a three-year deal with Sky to provide it with wholesale voice services to support over one million Sky Talk customers

Openreach deployed fibre to the premises (FTTP) on a new 1,000 acre greenfield site at Ebbsfleet Valley in Kent from August 2008 as part of an initial trial. At this site, Openreach offered the communications industry a wholesale fibre-based broadband product, facilitating competition at a retail level. The service could support speeds of up to 100Mb – the fastest headline speed available to residential customers in the UK.

In August 2008, BT signed a five-year managed network solutions agreement with Mobile Broadband Network Limited (MBNL) on behalf of the joint venture partners 3 UK and T-Mobile UK to provide and manage high-speed connectivity between their base stations and BT's core national network in the UK.

BT completed a number of smaller transactions in 2008, including the acquisitions of: Brightview Group Limited (Brightview) (a consumer internet service provider); Basilica Group Limited (Basilica) (one of the UK's leading providers of IT solutions to businesses); Lynx Technology Limited (Lynx Technology) (one of the UK's foremost suppliers of IT services); INS Group SA (the Belgium-based network and systems operator); Square Mile Marina Limited (a marina Wi-Fi network operator); and Fresca Limited (a specialist retail e-commerce service provider)

During 2008, BT's UK accreditation to environmental management standard ISO 14001 was renewed, and BT achieved certification for its operations in Ireland, Italy and Belgium.

During 2008, BT was ranked as the top telecommunications company in the Dow Jones Sustainability Index for the seventh year in a row. The Dow Jones Sustainability Indexes rank companies for their success in managing social, ethical and environmental issues for competitive advantage.

In December 2008, BT announced a partnership with the BBC and ITV to launch a new digital entertainment platform. The new platform aimed to build on BT Vision and Freeview and to bridge the gap between two previously separate technologies, bringing TV to broadband and broadband to the TV. It would combine free digital channels with free on-demand content from the public service broadcasters as well as pay-TV delivered over the broadband line. The 'Youview' product was launched in 2012.

In July 2008 BT acquired Ufindus, one of the UK's leading online business

directories. The acquisition from Iomart Group plc underpinned the continued growth of BT Directories, its classified advertising and directories business, supporting the increasing demand for online directory enquiries.

In July 2008 BT acquired Ribbit Corporation, a Silicon Valley-based 'Telco 2.0' platform company for $105m. The acquisition complemented BT's existing capability in software development platforms. The integration of Ribbit with 21CN progressed well during the year.

BT introduced The I-Plate, a self-installable device that could be fitted to an end user's master telephone socket to improve broadband speeds by eliminating electrical interference.

BT established a collaborative research and innovation centre in the United Arab Emirates with the Emirates Telecommunications Corporation (Etisalat) and Khalifa University.

In May 2008, Ofcom removed BT's SMP (significant market power) designation in relation to the provision of wholesale broadband access services in defined geographic areas of the UK (defined as 'Market 3'). This followed Ofcom's finding that effective competition in the provision of broadband in these areas had resulted from cable companies and CPs purchasing unbundled local loops from Openreach. All previous regulation of BT's wholesale activities in relation to broadband services in these areas was therefore removed.


BT launched Ribbit for salesforce.com. This service made it easy for sales professionals to update key customer relationship management (CRM) systems using seamless voice-to-text technology, both from the desk and on the move.

In 2009, BT announced a new Friends & Family Mobile scheme which now offered discounts of up to 40% on calls to mobiles – making it cheaper to call a mobile from a BT landline than from prepay mobiles.

In February 2009 BT announced an agreement to provide Sky with a managed directory enquiries service.

In March 2009, following consultation, Ofcom published a policy statement setting out a regulatory framework for next generation access (NGA). This gave sufficient regulatory certainty for BT to proceed with the initial phase of its super-fast broadband roll out.

BT announced that calls to 0845 and 0870 numbers would be included for free in its packages – a first for the UK market.

BT's range of handsets won praise in 2009 for its contribution to reducing carbon emissions with new energy saving power supplies.

BT was named as the Reader's Digest most trusted internet service provider (ISP) and voted joint top for broadband customer service in a poll conducted by the Broadband Genie comparison website.

The creation of BT Engage IT (incorporating Basilica and Lynx, acquired in September 2007) enabled BT to offer customers a wide range of IT services, including data centre virtualisation, unified communications and managed services.

3 Ireland selected BT as its principal subcontractor to support the delivery of the National Broadband Scheme. The Scheme was run by the Department for Communications, Energy and Natural Resources with the aim of achieving broadband availability throughout the Republic of Ireland.

In March 2009 BT announced that Belfast would be one of the first regions in the UK to benefit from BT's investment in super-fast broadband.

The acquisition of Wire One Holdings Inc (Wire One) – one of the leading providers of videoconferencing services in the US – enhanced BT Conferencing's position as the leading videoconferencing operator in the world.

Starting in summer 2009, Openreach began running operational pilots of fibre to the cabinet (FTTC) between the exchange and customer premises. Two exchanges – one in Muswell Hill in North London and one in Whitchurch, South Glamorgan – will conducted FTTC pilots involving up to 15,000 customer premises in each area.

End users were able to experience headline speeds of up to 40Mb.

In August 2009 BT transferred its consumer and SME broadband and voice customer base in the Republic of Ireland to Vodafone, and agreed to provide wholesale network services to underpin Vodafone's business over a seven-year period.

Openreach made major reductions in the connection and rental costs of services in its Ethernet portfolio with effect from 1 February 2009, supporting and improving the access and backhaul markets in the UK at lower cost and supporting the growth of data-intensive applications.

In 2009, BT helped to launch Communicating for Success, a co-funded partnership between BT and the Football Foundation, to tackle digital exclusion and improve communications skills in the UK.

BT completed the acquisition of the remaining shares of Net2S SA, a publicly traded IT services company listed in France, other than certain treasury shares and locked-up shares issued under employee share plans (BT had acquired over 91% of the outstanding issued share capital of Net2S SA in 2008).

The degree of competition in the retail calls and lines markets led Ofcom to remove certain restrictions in 2009 to allow BT to provide bundled products so that it could compete more effectively. BT now had the freedom to offer attractive bundled packages of broadband, calls and TV services.

In December 2009 BT signed a contract with the Northern Ireland government to extend the roll out of fibre-based broadband beyond BT's existing commercial deployment plans through a combination of public-private sector investment and European Union funding.

In November 2009 BT announced a multi-million pound investment in contact centre operations in Northern Ireland, with the creation of two dedicated digital care sites, enabling customers to access the highest quality of customer support via e-mail, live chat and other web-based contact including proactive support channels such as Twitter. This development involved advanced training and development of more than 600 BT customer care advisors in Northern Ireland.

The winter of 2009-2010 saw some extreme weather conditions in the UK with considerable flooding and snow. On 20 November 2009, just under 10,000 phone lines and 37,000 broadband lines were cut off as bridges collapsed and extensive flooding affected homes and businesses in an area of Cumbria. Within 12 hours phone services to the majority of customers had been restored and most broadband lines were working again within 36 hours.


The Inspiring Young Minds programme, BT's global development partnership with UNICEF, which brings IT skills to children, was launched in China in 2010, following launches in Brazil in 2008 and South Africa in 2007.

Following the conclusion of the Office of Communications (Ofcom) narrowband market review in 2010 we are able to benefit from our new regulatory freedom to launch bundled services targeted at different customer groups.

During 2010 BT started the roll out of its ADSL2+ service, delivering speeds of up to 20Mb/s at no extra cost to customers. This technology increased the speed at which customers could download information over their copper telephone line.

In January 2010 BT launched BT Infinity, its super-fast fibre-based broadband proposition then offering download speeds of up to 40 Mb/s and upload speeds of up to 10 Mb/s, which was expected to change the way customers use the internet. BT aimed to make the service available to at least 40% of UK premises in 2012. BT had over 550,000 Infinity customers by 31 March 2011.

BT entered into a commercial partnership with OnLive Inc, a Silicon Valley based 'cloud' computing video gaming business, which gave BT exclusive rights to bundle its game service with broadband in the UK. This service enabled customers to purchase and play video games streamed over broadband.

BT launched Sky Sports 1 and Sky Sports 2 on BT Vision in time for the 2010-11 Premier League football season.

This followed the conclusion of the Ofcom pay TV market investigation in March 2010 which required Sky to provide these premium sports channels at wholesale regulated prices, which enabled BT and other pay TV operators to offer them at lower prices than those previously available.

BT launched the BBC iPlayer service on BT Vision, and expand the range of HD content, adding 3D movies for the first time and enhancing the HD download service.

In 2010, BT signed UK wi-fi deals to provide Orange, Vodafone and O2 with BT Openzone wi-fi access.

In April 2010 BT Wholesale signed a major MNS (managed network services)contract with Orange UK to take on the management and development of its UK fixed line broadband infrastructure for consumers and SMEs.

In May 2010 BT announced a strategic investment plan to strengthen our business in the Asia Pacific region. BT recruied up to 300 additional people in the key customer markets of Australia, China, Hong Kong, India, Japan and Singapore, in order to build up sales and professional services teams, bid and project management, and service operations teams. This allowed BT to provide enhanced service delivery capabilities as customers invest throughout the region. BT's continued commitment to the region and our customers was recognised through BT winning the Telecom Asia – Best Managed Services Provider award for the second consecutive year.

In August 2010 BT signed a contract with Starbucks Coffee Company to provide wi-fi across some 140 Starbucks coffee shops in Germany, extending BT's relationship with Starbucks in the UK and Ireland.


In January 2011 BT launched the new Home Hub 3, including Smart Wireless which looks for the best wireless channel to ensure the strongest possible connection at all times. It used 39% less power and its smaller design typically used 25% less plastic than previous models.

In 2011 BT Directories released the compact Phone Book, reducing its size by 15% to fit into letter boxes, saving 2,000 tonnes of paper each year. BT Directories also launched a free Android smartphone application to make The Phone Book available to mobile users.

In March 2011 BT Wholesale launched the company's first digital content distribution propositions to the UK market.

In April 2011 BT launched a new online fundraising service for UK charities called MyDonate (www.bt.com/mydonate), the first online fundraising service not to charge a subscription fee or take commission. BT developed the MyDonate service with a number of charities – including Cancer Research UK, Changing Faces, Kid's

Out, NSPCC and Women's Aid. Within days of launch, hundreds of charities had signed up to exploit this new platform for giving.

In February 2011 BT introduced a new procurement standard requiring all suppliers to measure and report their carbon and greenhouse gas emissions and set reduction targets. This was designed to encourage supplier innovation and to speed up development of low-carbon technologies.

In March 2011 BT launched a new range of printed and online safety advice to help parents keep children safe on the internet. At the same time the company launched a major campaign to prompt BT broadband customers to consider BT's free Family Protection parental-control software. The software was offered automatically as part of the install process.

Plusnet launched its own competitively priced superfast fibre-based broadband service, offering customers download speeds of up to 40Mps via FTTC.

BT's fibre-based 'Total Transmission' network went live in the Republic of Ireland in October 2011. This network upgrade increased the capacity of BT's network, lowered the cost of bandwidth, brought the network closer to businesses and enhances BT's Ethernet and IP capabilities to offer new services.

BT launched its fastest ever broadband service in November 2011, a FTTP Infinity service which supported downstream speeds of up to 100Mbps.

BT recruited a new mobile workforce of over 800 engineers (including many former Armed Forces personnel) to manage the spikes in demand that occured when fibre broadband was first made available in an exchange area.

In December 2011 BT announced the formation of BT Advise, which bought together the BT Global Services experts delivering consulting, systems integration and managed services around the world under one team. Customers benefited from engaging with a team made up of 4,500 highly skilled professionals who applied industry-leading processes and methodologies.


As official communications services partner for the London 2012 Olympic and Paralympic Games BT delivered a single communications network across 94 locations (including 34 competition venues) to make the London 2012 Games, the biggest sporting event ever held in the UK, the most connected games ever.

Every official photograph and sports report and millions of calls, emails, texts and tweets were carried over BT's communications network, and billions of visits to the London 2012 Games website. BT carried all the broadcast pictures for every sporting moment outside the Olympic Park. BT provided 80,000 connections, 16,500 fixed telephone lines, 14,000 mobile SIM cards, 10,000 cable TV outlets, 5,500km of internal cabling and 1,800 wireless access points.

FTTP in the athletes' village served 2,818 flats, providing the athletes and coaches staying here with free BT Infinity super-fast broadband throughout the Olympic and Paralympic Games.

A BT fibre-based network delivered 5,000 hours of live TV coverage of the Games to the International Broadcast Centre for onward transmission to broadcasters.

To do all this, BT had to install several thousand kilometres of internal cabling, the equivalent of more than 100 marathons. The single, integrated communications network was a first for a summer Games.

In February 2012 BT announced plans to expand operations across Turkey, the Middle East and Africa.

In March 2012 BT announced that it was upgrading the copper access network within our FTTC footprint by increasing the spectrum allocation at cabinets, so that the copper running from cabinets to the premises could support broadband speeds of up to 80Mbps downstream and up to 20Mbps upstream.

In March 2012 BT Vision won the IP&TV Industry Award in the Best Service Growth Achievement category. This is awarded for significant growth in the number of subscribers to an IP-enabled TV service.

In April 2012 BT launched FTTC BT Infinity with up to 80Mbps downstream and

up to 20Mbps upstream.

YouView, the joint venture between BT, the UK public service broadcasters, TalkTalk Group and Ariva, was launched.

BT started offering customers the YouView set-top box in October 2012. It gave them standard definition (SD) and HD Freeview channels and the ability to pause, record and rewind live TV and on-demand content. YouView's programme guide scrolled back seven days to give customers easy access to catch-up TV from BBC iPlayer, ITV Player, 4oD and Demand 5. Customers with the Vision 2.0 set-top box, launched the same year, had advanced search and recommendation facilities in addition to the same basic features.

In June 2012 BT combined all its wi-fi activities into one identity: BT Wi-fi. A number of major deals were won, including contracts with Barclays bank and Game (a videogames retailer) for in-branch and in-store wi-fi. Wi-fi minutes trebled during 2011-12 and reached 4.7bn minutes in the fourth quarter and over 13bn minutes for the year.

The 75th anniversary of the 999 service showcased BT's long history of managing high-volume call centres. Of the 31m 999 calls received by BT operators each year, 98% were answered within five seconds.

BT won 19 Broadband Delivery UK (BDUK) bids to deploy fibre broadband in areas outside its commercial fibre broadband footprint. In December 2012 BT connected the first BDUK customers in North Yorkshire, less than six months after signing the contract.


BT launched the SmartTalk app, which allowed customers to make phone calls from their smartphone – wherever they were in the world – but which were billed as if calling from their BT home phone.

BT purchased a licence for 2x15MHz of FDD and 20MHz of TDD 2.6GHz spectrum in February 2013 to provide fast 4G connectivity, enabling BT to provide business and consumer customers an enhanced range of mobile broadband services, building on its existing strength in wi-fi.

In April 2013, Openreach launched FTTP-on-Demand. This allowed end-customers in FTTC areas to secure an FTTP connection if they needed one made. FTTP-on-Demand was initially available in 42 exchange areas, with plans to make it available across BT's entire fibre broadband footprint.

In April 2013 BT Wholesale launched FTTP-on-Demand, which was initially available within a subset of the FTTC footprint. It allowed end-users in FTTC areas get a FTTP connection. Faster speeds of up to 330Mbps were possible when fibre was connected all the way to the customer premises if they needed one.

BT launched it new BT Hub 4 wireless router on 7 May, designed to offer broadband users the UK's most reliable connection from a major internet service provider (ISP), thanks to smart dual band wireless technology. The new slimline hub combines Smart Wireless and concurrent dual band wireless – dual stream 802.11n MIMO technology simultaneously at 2.4GHz and 5GHz – which helped avoid interference.

In May BT launched new broadband and telephony packages and a 76Mbps fibre product under the Plusnet Business brand.

BT Business launched a 330Mbps FTTP service in June and a new managed Wide

Area Network (WAN) service in August tailored specifically to the needs of SMEs.

BT acquired UEFA Champions League and EUFA Europa League football rights for three years from summer 2015.

In August 2013, BT launched three live TV sport channels - BT Sport 1, BT Sport 2 and ESPN. These channels were on-air 24/7 and were available in both standard and high definition. BT Sport customers can get the sports channels through BT's two latest TV platforms with BT Infinity, over digital terrestrial TV, through an online app, or over satellite. They were also available to Virgin Media customers and in the Republic of Ireland with Setanta, through wholesale deals. BT Sport was free with BT broadband. Non-BT broadband customers could subscribe for £12 a month for standard definition or £15 for high definition.

BT improved BT TV with additional third-party content and channels such as Comedy Central HD, Discovery HD, Disney Channel and Sky Movies, 38 additional channels in total.

Following the appointment of Ian (now Lord) Livingston, Gavin Patterson was appointed Chief Executive in September 2013. Gavin was formerly CEO BT Retail and prior to that Managing Director, BT Consumer, BT Retail

BT launched Hub 5, its latest home hub router, on 11 October 2013. The new hub supported superfast ac wireless with three aerials, allowing up to 1.3Gbps wireless speed with compatible devices.


BT's Research Laboratories at Adastral Park set a new data speed world record in recent trials, achieving speeds of up to 1.4 terabits per second (Tbs) over a fibre line in its core network between London and Ipswich, enough to send 44 uncompressed HD films a second. The record was broken for a second time later in the year connecting at 2.2 Tbps, and further in-the-field speed trials in October set the record for the third time, achieving speeds of up to 3 Tbps, the fastest achieved over an existing fibre link using commercial grade hardware and software in a real-world operational environment.

Following its 4G spectrum purchase in February 2013, BT announced an MVNO partnership with Everything Everywhere (EE) in March 2014.

BT launched the BT One Phone, providing business with an innovative fixed-mobile solution.

In February 2014, BT launched a new YouView set-top box, building on the success of the first generation award-winning box. It was even smaller and faster and allowed customers to store up to 300 hours of TV. The new box was smaller and sleeker because it didn't need a fan and it shared the same look and feel as the rest of the BT devices family, including the BT Home Hub 4 and Hub 5.

BT launched BT One Phone in July for small and medium enterprise, bringing together all of a company's office phone system and mobile phone needs into a single system, hosted in the cloud and delivered on a mobile phone.

BT Business offered quick and easy access to mobile data in August with the launch of its new 4G mobile plans. Every new BT Business Mobile connection now came with 4G access and unlimited BT Wi-fi as standard and at no extra cost. The new 4G services run over the BT Business national mobile service, enabled by the MVNO agreement BT signed with EE earlier in the year.

BT launched its most advanced call-blocking phone to date in September, stopping up to 100 per cent of nuisance calls. The BT8500 Advanced Call Blocker follows on the 2013 launch of the BT6500 Nuisance Call Blocker – which quickly became BT's fastest-ever-selling home phone – and was BT's response to new research that showed unwanted calls and automated recordings from PPI claim companies and sales people are Britons' top annoyance.

BT won the Queen's Award to Enterprise (Innovation) for its pioneering innovation IP Exchange (IPX) – a communications transit hub interconnecting UK and global telecoms companies

BT launched a new Infinity, TV and Netflix package in November. The new offer included BT's new mini YouView box. The set-top box provided access to the YouView service, including up to 70 Freeview TV and radio channels, as well as access to BT TV's Box Office service for the latest movies, plus free BT Sport.