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16/10/2001
BT abandons joint venture with AT&T
BT has announced that it is to hang up on its loss making $10 billion joint venture with US telecoms giant AT&T.
The agreement to end the joint international telecoms business will see the accounts and networks set up under the Concert venture returned into the hands of parent companies BT and AT&T.
BT has reassured Concert customers that the transfer will be seamless operation and will continue to provide the existing services.
Sir Peter Bonfield, the Chief Executive of BT, said: “Since Concert was conceived as an international venture the global marketplace in our sector has changed out of all recognition and we need to change with it. Clearly there will be substantial costs associated with an unwind but this solution gives BT a better way forward than the status quo.
“The clarity of focus and control resulting from the unwind will enable us to generate improved shareholder returns. Our priority now is to eliminate the losses in our returned business while continuing to deliver seamless solutions to our customers.”
It is understood that the winding up of the venture will cost BT around $2 billion, while AT&T costs may be in excess of $5 billion. The will result in over 2,000 jobs losses, which is a 40 per cent reduction in Concert’s existing 6,300 staff employed worldwide. However, many of the jobs will be taken back into the respective parent companies that run international telecoms operations.
Although pitched at launch three years ago as good for customers, employees and investors, the venture has been a constant drain on profits and the wind up of Concert almost certainly means an end to BT’s dreams of becoming a major player in the sector of worldwide telecoms provision. (SP)
The agreement to end the joint international telecoms business will see the accounts and networks set up under the Concert venture returned into the hands of parent companies BT and AT&T.
BT has reassured Concert customers that the transfer will be seamless operation and will continue to provide the existing services.
Sir Peter Bonfield, the Chief Executive of BT, said: “Since Concert was conceived as an international venture the global marketplace in our sector has changed out of all recognition and we need to change with it. Clearly there will be substantial costs associated with an unwind but this solution gives BT a better way forward than the status quo.
“The clarity of focus and control resulting from the unwind will enable us to generate improved shareholder returns. Our priority now is to eliminate the losses in our returned business while continuing to deliver seamless solutions to our customers.”
It is understood that the winding up of the venture will cost BT around $2 billion, while AT&T costs may be in excess of $5 billion. The will result in over 2,000 jobs losses, which is a 40 per cent reduction in Concert’s existing 6,300 staff employed worldwide. However, many of the jobs will be taken back into the respective parent companies that run international telecoms operations.
Although pitched at launch three years ago as good for customers, employees and investors, the venture has been a constant drain on profits and the wind up of Concert almost certainly means an end to BT’s dreams of becoming a major player in the sector of worldwide telecoms provision. (SP)
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