BT Group
Encyclopedia
BT Group plc is a global telecommunications services company headquartered in London, United Kingdom. It is one of the largest telecommunications services companies in the world and has operations in more than 170 countries. Through its BT Global Services
division it is a major supplier of telecoms services to corporate and government customers worldwide. Its BT Retail
division is a leading supplier of telephony, broadband
and subscription television services in the UK, with over 18 million customers.
BT Group has its primary listing on the London Stock Exchange
and is a constituent of the FTSE 100 Index
. It has a secondary listing on the New York Stock Exchange
.
. The company's origins date back to the establishment of the first telecommunications companies in the United Kingdom. Among them was the first commercial telegraph service
, the Electric Telegraph Company
, established in 1846. As these companies amalgamated and were taken over or collapsed, the remaining companies were transferred to state control
under the Post Office
. These companies were merged and rebranded
as British Telecommunications.
From 1878, the telephone service in the United Kingdom was provided by private sector companies such as the National Telephone Company
, and later by the General Post Office
. In 1896, the National Telephone Company was taken over by the General Post Office. In 1912, it became the primary supplier of telecommunications services, after the Post Office took over the private sector telephone service in the UK, except for a few local authority services. Those services all folded within a few years, the sole exception being Kingston upon Hull
, where the telephone department became present day KCOM Group. Telegraph and Telephone services became the exclusive responsibility of the Post Office Engineering department.
Converting the Post Office into a nationalised industry, as opposed to a governmental department, was first discussed in 1932 by Lord Wolmer. His ideas were recorded in the book Post Office Reform. In 1932, the Bridgeman Committee was formed, "to enquire and report as to whether any changes to the constitution, status or system of organisation of the Post Office would be in the public interest". The Committee's report was rejected. In 1961, the subject received further attention, the proposals were ignored. The Post Office remained a department of central government, with the Postmaster General sitting in Cabinet
as a Secretary of State
.
In March 1965, Tony Benn
, the acting Postmaster General, wrote to the Prime Minister, Harold Wilson
, proposing that studies be undertaken aimed at converting the Post Office into a nationalised industry
. A party was established to look into the advantages and disadvantages of the proposal, and its findings were found to be favourable enough for the Government to re-establish a Steering Group on the Organisation of the Post Office. After some initial deliberations that the business should be divided into five divisions; Post
, Telecommunications, Saving
s, Giro
and National Data Processing Services, it was decided that there should be two: Post and Telecommunications. These events finally resulted in the introduction of the Post Office Act, 1969.
On 1 October 1969, under the Post Office Act, 1969, the Post Office ceased to be a government department and it became established as a public corporation
. The Act gave the Post Office the exclusive privilege of operating telecommunications systems with listed powers to authorise others to run such systems. Effectively, the General Post Office retained its telecommunications monopoly.
as British Telecom in 1980, although it remained part of the Post Office.
The British Telecommunications Act, 1981 transferred the responsibility for telecommunications services from the Post Office, creating two separate corporations, Post Office Ltd.
and British Telecom. At this time the first steps were taken to introduce competition into the UK telecommunications industry. In particular, the Act empowered the Secretary of State for Trade and Industry, as well as British Telecom, to license other operators to run public telecommunications systems. Additionally, a framework was established which enabled the Secretary of State to set standards with the British Standards Institution (BSI) for apparatus supplied to the public by third parties, and had the effect of requiring British Telecom to connect approved apparatus to its systems.
The Secretary of State made use of these new powers and began the process of opening up to and the apparatus supply market, where a phased programme of liberalisation was started in 1981. In 1982, a licence was granted to Cable & Wireless to run a public telecommunications network through its subsidiary, Mercury Communications.
The new legislation had to enable British Telecom to become more responsive to competition in the UK and to expand its operations globally. Commercial freedom granted to British Telecom allowed it to enter into new joint ventures and, if it so decided, to engage in the manufacture of its own apparatus.
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. Substantially all the government's remaining shares were sold in a third flotation in July 1993, raising £5 billion for the Treasury and introducing 750,000 new shareholders to the company.
The 1984 Act also abolished British Telecom’s 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. It now required a licence in the same way as any other telecommunications operator. The principal licence granted to British Telecom laid down strict and extensive conditions affecting the range of its activities, including those of manufacture and supply of apparatus.
, Competition and Choice: Telecommunications Policy for the 1990s, was issued. In effect, it ended the duopoly which had been shared by British Telecom and Mercury Communications in the UK since November 1983 and the build up to privatisation. The new, more open and fairer policy, enabled customers to acquire telecommunications services from competing providers using a variety of technologies. Independent 'retail' companies were 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 enabling the company to compete freely and more effectively by offering flexible pricing packages to meet the needs of different types of customer.
In December 2000, following modifications to BT’s licence in April 2000, BT offered local loop unbundling (LLU) to other telecommunications operators, enabling them to use BT’s copper local loops (the connection between the customer’s premises and the exchange) to connect directly with their customers. By the end of August 2005, 105,055 lines had been unbundled.
In 1999, BT purchased Securicor's shares in Cellnet for £3.15 billion, Securicor originally invested £4 million in Cellnet in 1983, the company was later rebranded as BT Cellnet, and it became a part of BT Wireless, a group of subsidiary companies owned by BT.
In October 2001, at a general meeting held in Birmingham
, 4.297 billion British Telecommunications shares voted in favour of the demerger, and 0.67 million voted against. In , BT Cellnet demerged from BT and was relaunched on as O2.
In February 2004, the company was subject to rumours of take-over bids from KPN
, the Dutch telecommunications group though these never came to fruition. In 2005 rumours of KPN (and several other international network operators) bidding for the various branches of O2 persisted, though following the company's posting of better than expected results so soon after demerging some speculation shifted to O2 itself making bids for other businesses.
In March 2005, the company underwent a corporate reorganization, that saw mmO2 plc being de-listed from the London Stock Exchange
and acquired (via a share swap) by a new company, O2 plc, which was listed on the London Stock Exchange in its place. The summer of 2005 saw the company under threat of crippling strike action
by Communication Workers Union members following disputes over pay and remuneration, though unrelated to earlier job losses as part of the reorganization. This was resolved without strikes taking place after several months of negotiations between the company and the trade union
.
, the international directories and associated e-commerce business for £2.14 billion. Both activities were completed in June 2001. The group also sold its property portfolio to JV property company Telereal
.
The Communications Act, 2003 which came into force on 25 July 2003 introduced a new industry regulator, the Office of Communications (Ofcom
), to replace the Office of Telecommunications (Oftel
). It also introduced a new regulatory framework. The licensing regime was replaced by a general authorisation for companies to provide telecommunications services subject to general conditions of entitlement and, in some instances, specific conditions. Under a specific condition BT retained its universal service obligation (USO) for the UK, excluding the Hull area. The USO included connecting consumers to the fixed telephone network, schemes for consumers with special social needs, and the provision of call box services.
In the summer of 2004, BT launched Consult 21, an industry consultation for BT’s 21st century network (21CN) programme. 21CN is a next generation network transformation, due for completion by end 2010. Using internet protocol technology, 21CN will replace the existing networks and communications from any device such as mobile phone, PC, PDA or home phone, to any other device.
Following the Telecommunications Strategic Review (TSR), in September 2005 BT signed legally binding Undertakings with Ofcom to help create a new regulatory framework for BT and the UK telecoms industry generally.
Openreach provides provision and repair in the "last mile" of copper wire. Formed from 25,000 engineers previously employed by BT's Retail and Wholesale divisions. It is designed to ensure that other communications providers (CPs) have exactly the same operational conditions as parts of the BT group. Opened for business on 11 January 2006, it reports directly into the BT chief executive.
In February 2005, BT acquired El Segundo, California
-based telecoms giant Infonet (now re-branded BT Infonet), giving BT access to new geographies.
It also acquired the second largest telecoms operator in the Italian business market, Albacom.
In April 2005, it bought Radianz from Reuters (now rebranded as BT Radianz), which expanded BT's coverage, provided BT with more buying power in certain countries.
for £30.6 million. The BT Home Hub
manufactured by Inventel
was also launched in June 2006.
In October 2006 BT confirmed that it would be investing 75% of its total capital spending, put at £10 billion over five years, in its new Internet Protocol
(IP) based 21st century network
(21CN). Annual savings of £1 billion per annum are expected when the transition to the new network is complete in 2010, with over 50% of its customers transferred by 2008. That month the first customers on to 21CN was successfully tested at Adastral Park
in Suffolk.
In January 2007, BT acquired Sheffield based ISP, PlusNet
plc, adding an additional 200,000 customers. BT stated that PlusNet will continue to operate separately out of its Sheffield head-office.
On 1 February 2007 BT announced agreed terms to acquire International Network Services Inc. (“INS”), an international provider of IT consultancy and software. This increases BT presence in North America enhancing BT's consulting capabilities.
On 20 February 2007 Sir Michael Rake, then chairman of accountancy firm KPMG
International, would succeed Sir Christopher Bland, who stepped down in September of that year.
On 20 April 2007 BT acquired Comsat
International which provides network services to the South American corporate market.
On 1 October 2007 BT purchased Chesterfield based Lynx Technology which has been around since 1973.
BT acquired Wire One Communications in June 2008 and folded the company into BT Conferencing, its existing conferencing unit, as a new video business unit
In July 2008, BT acquired the online business directory firm Ufindus for £20 million in order to expand its position in the local information market in the UK..
On 28 July 2008, BT acquired Ribbit
, of Mountain View, California, "Silicon Valley's First Phone Company." Ribbit provides Adobe Flash
/Flex
APIs, allowing web developers to incorporate telephony features into their Software as a Service
(SaaS) applications.
On 1 April 2009 BT Engage IT is created from the unclean merger of two previous BT acquisitions Lynx Technology and Basilica.
Apart from the name change not much else changes in operations for another 12 months.
On 14 May 2009 BT said it was cutting up to 15,000 jobs in the coming year after it announced its results for the year to 31 March 2009.
In July 2009 BT offered workers a long holiday for an up front sum of 25% of their annual wage or a one-off payment of £1000 if they agree to go part time.
On 5 October 2009 Martin Balaam replaces Nick Gorringe as managing director of struggling division BT Engage IT.
British Telecommunications plc (BT) is a wholly owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group. BT Group plc is listed on stock exchanges in London and New York.
BT runs the telephone exchange
s, trunk network and local loop
connections for the vast majority of British fixed-line telephones. Currently BT is responsible for approximately 28 million telephone lines in the UK. Apart from Kingston Communications
, which serves Kingston upon Hull, BT is the only UK telecoms operator to have a Universal Service Obligation
(USO) which means it must provide a fixed telephone line to any address in the UK. It is also obliged to provide public call boxes.
BT's businesses are operated under special government regulation by the British telecoms regulator Ofcom
(formerly Oftel
). BT has been found to have Significant Market Power in some markets following Market Reviews by Ofcom. In these markets, BT is required to comply with additional obligations such as meeting reasonable requests to supply services and not to discriminate.
As well as continuing to provide service in those traditional areas in which BT has an obligation to provide services or is closely regulated, BT has expanded into more profitable products and services where there is less regulation. These are principally, broadband
internet service and bespoke
solutions in telecommunications and information technology.
BT Group is organised into the following business divisions:
From 1 July 2007 two additional divisions were put in place:-
After a pay rise of over 40%, BT's chief financial officer, Hanif Lalani, became one of the very few UK financial directors whose annual remuneration exceeds £1 million. He became CEO of BT Global Services in October 2008 and was replaced as BT Group CFO by Tony Chanmugam on 1 December 2008.
In recent years, the strategy of BT plc has been to reduce its dependence on traditional voice revenues and instead obtain an increasing portion of its turnover from so-called New Wave revenues. At the heart of this strategy is BT Global Services, which has won many significant contracts in the commercial and public sectors, in part through its portrayal as a "momentum story".
of any UK public company. The trustees valued the scheme at £36.7 billion at the end of 2010 ; An actuarial valuation valued the deficit of the scheme at £9.043 billion as of 31 December 2008.
However following a change in the regulations governing inflation index linking, the deficit was estimated at £5.2 billion in November 2010.
BT and the Trustee have agreed a 17 year recovery plan with the first three years’ payments amounting to £525mm. As of 2013 average annual payments have been estimated at £533MM. The next triennial valuation is scheduled for December 2011.
BT’s pension obligation is derived from two pension plans: BTPS, the company’s defined-benefit pension scheme which was closed in 2001, and the BT Retirement Saving Scheme (BTRSS), which was set up to replace the BTPS and is a defined-contribution retirement plan.
and British Gas
, and now all of their exchanges, satellite networks and offices are powered by renewable energy. BT is a member of the Corporate Leaders Group on Climate Change. They signed a letter urging the government to do more to tackle this problem. Janet Blake, head of global corporate social responsibility (CSR) at BT, says that she would like to see incentives that find ways of rewarding those companies that focus on climate change by making investments in green business models.
BT has made it clear that it has an ambitious plan to reduce carbon dioxide emissions. Its strategy includes steps to reduce the company's carbon footprint as well as those of customers, suppliers and employees. BT has actually pledged to achieve an 80% reduction by the year 2016, which will require further efficiency improvements.
Since June 2009 BT has been one of the founding members of the Ellen MacArthur Foundation
.
which it believed gave it patent rights on the use of hyperlink
technology on the World Wide Web
. The corresponding UK patent had already expired, but the US patent was valid until 2006. Opponents of BT's claim held that the patent had never been valid, due to prior art
by both Douglas Engelbart
and Ted Nelson
's Project Xanadu
. Nevertheless on 11 February 2002, BT began a court case relating to its claims in a U.S. federal court against the Internet service provider
Prodigy Communications Corporation
. In the case British Telecommunications Plc. v. Prodigy
, the United States District Court for the Southern District of New York
ruled on 22 August 2002 that the BT patent was not applicable to Web technology and granted Prodigy's request for summary judgement of non-infringement. The issue of prior art was thus not addressed.
and Talk Talk) with the spyware
company Phorm
(responsible under their 121Media guise for the Apropos rootkit
) to intercept and analyse their users' click-stream data and sell the anonymised aggregate information as part of Phorm's OIX advertising service. The practice, known as "behavioural targeting" and condemned by critics as "data pimping
", came under intense fire from various internet communities and other interested-parties who believe that the interception of data without the consent of users and web site owners is illegal under UK law (RIPA). At a more fundamental level, many have argued that the ISPs and Phorm have no right to sell a commodity (a user's data, and the copyright content of web sites) to which they have no claim of ownership. In response to questions about Phorm and the interception of data by the Webwise system Sir Tim Berners-Lee, credited as the creator of the World Wide Web, indicated his disapproval of the concept and is quoted as saying that his data and web history:
BT Global Services
BT Global Services is a division of United Kingdom Telecommunications operator BT Group. It delivers a combination of communications and IT services to over 10,000 organisations and governments worldwide. Its customers include over 25% of the global Fortune 500 and it is the largest supplier of...
division it is a major supplier of telecoms services to corporate and government customers worldwide. Its BT Retail
BT Retail
BT Retail is the consumer sales arm of Britain's BT Group.BT Retail is responsible for selling PSTN, BT Total Broadband, BT Vision, etc to consumers and end business users...
division is a leading supplier of telephony, broadband
Broadband Internet access
Broadband Internet access, often shortened to just "broadband", is a high data rate, low-latency connection to the Internet— typically contrasted with dial-up access using a 56 kbit/s modem or satellite Internet with inherently high latency....
and subscription television services in the UK, with over 18 million customers.
BT Group has its primary listing on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
and is a constituent of the FTSE 100 Index
FTSE 100 Index
The FTSE 100 Index, also called FTSE 100, FTSE, or, informally, the footsie , is a share index of the 100 most highly capitalised UK companies listed on the London Stock Exchange....
. It has a secondary listing on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
.
History
BT is the world’s oldest telecommunications companyTelephone company
A telephone company is a service provider of telecommunications services such as telephony and data communications access. Many were at one time nationalized or state-regulated monopolies...
. The company's origins date back to the establishment of the first telecommunications companies in the United Kingdom. Among them was the first commercial telegraph service
Telegraphy
Telegraphy is the long-distance transmission of messages via some form of signalling technology. Telegraphy requires messages to be converted to a code which is known to both sender and receiver...
, the Electric Telegraph Company
Electric Telegraph Company
The Electric Telegraph Company was the world's first public telegraph company founded in the United Kingdom in 1846 by Sir William Fothergill Cooke and John Lewis Ricardo, MP for Stoke-on-Trent....
, established in 1846. As these companies amalgamated and were taken over or collapsed, the remaining companies were transferred to state control
Government-owned corporation
A government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government...
under the Post Office
General Post Office
General Post Office is the name of the British postal system from 1660 until 1969.General Post Office may also refer to:* General Post Office, Perth* General Post Office, Sydney* General Post Office, Melbourne* General Post Office, Brisbane...
. These companies were merged and rebranded
Rebranding
Rebranding is the creation of a new name, term, symbol, design, or a combination of them for an established brand with the intention of developing a differentiated position in the mind of stakeholders and competitors....
as British Telecommunications.
18781969: General Post Office
National Telephone Company
The National Telephone Company was a British telephone company from 1881 until 1911 which brought together smaller local companies in the early years of the telephone...
, and later by the General Post Office
General Post Office
General Post Office is the name of the British postal system from 1660 until 1969.General Post Office may also refer to:* General Post Office, Perth* General Post Office, Sydney* General Post Office, Melbourne* General Post Office, Brisbane...
. In 1896, the National Telephone Company was taken over by the General Post Office. In 1912, it became the primary supplier of telecommunications services, after the Post Office took over the private sector telephone service in the UK, except for a few local authority services. Those services all folded within a few years, the sole exception being Kingston upon Hull
Kingston upon Hull
Kingston upon Hull , usually referred to as Hull, is a city and unitary authority area in the ceremonial county of the East Riding of Yorkshire, England. It stands on the River Hull at its junction with the Humber estuary, 25 miles inland from the North Sea. Hull has a resident population of...
, where the telephone department became present day KCOM Group. Telegraph and Telephone services became the exclusive responsibility of the Post Office Engineering department.
Converting the Post Office into a nationalised industry, as opposed to a governmental department, was first discussed in 1932 by Lord Wolmer. His ideas were recorded in the book Post Office Reform. In 1932, the Bridgeman Committee was formed, "to enquire and report as to whether any changes to the constitution, status or system of organisation of the Post Office would be in the public interest". The Committee's report was rejected. In 1961, the subject received further attention, the proposals were ignored. The Post Office remained a department of central government, with the Postmaster General sitting in Cabinet
Cabinet of the United Kingdom
The Cabinet of the United Kingdom is the collective decision-making body of Her Majesty's Government in the United Kingdom, composed of the Prime Minister and some 22 Cabinet Ministers, the most senior of the government ministers....
as a Secretary of State
Secretary of State (United Kingdom)
In the United Kingdom, a Secretary of State is a Cabinet Minister in charge of a Government Department ....
.
In March 1965, Tony Benn
Tony Benn
Anthony Neil Wedgwood "Tony" Benn, PC is a British Labour Party politician and a former MP and Cabinet Minister.His successful campaign to renounce his hereditary peerage was instrumental in the creation of the Peerage Act 1963...
, the acting Postmaster General, wrote to the Prime Minister, Harold Wilson
Harold Wilson
James Harold Wilson, Baron Wilson of Rievaulx, KG, OBE, FRS, FSS, PC was a British Labour Member of Parliament, Leader of the Labour Party. He was twice Prime Minister of the United Kingdom during the 1960s and 1970s, winning four general elections, including a minority government after the...
, proposing that studies be undertaken aimed at converting the Post Office into a nationalised industry
State ownership
State ownership, also called public ownership, government ownership or state property, are property interests that are vested in the state, rather than an individual or communities....
. A party was established to look into the advantages and disadvantages of the proposal, and its findings were found to be favourable enough for the Government to re-establish a Steering Group on the Organisation of the Post Office. After some initial deliberations that the business should be divided into five divisions; Post
General Post Office
General Post Office is the name of the British postal system from 1660 until 1969.General Post Office may also refer to:* General Post Office, Perth* General Post Office, Sydney* General Post Office, Melbourne* General Post Office, Brisbane...
, Telecommunications, Saving
National Savings and Investments
National Savings and Investments , formerly called the Post Office Savings Bank and National Savings, is a state-owned savings bank in the United Kingdom. It is an executive agency of the Chancellor of the Exchequer...
s, Giro
Girobank
Girobank was a British public sector financial institution founded in 1968 by the General Post Office. Itstarted life as the National Giro but went through several name changes, becoming National Girobank, then Girobank Plc , before merging into Alliance & Leicester Commercial Bank...
and National Data Processing Services, it was decided that there should be two: Post and Telecommunications. These events finally resulted in the introduction of the Post Office Act, 1969.
On 1 October 1969, under the Post Office Act, 1969, the Post Office ceased to be a government department and it became established as a public corporation
Public company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
. The Act gave the Post Office the exclusive privilege of operating telecommunications systems with listed powers to authorise others to run such systems. Effectively, the General Post Office retained its telecommunications monopoly.
19771982: British Telecom
In 1977, the Carter Committee Report recommended a further division of the two main services and for their relocation under two individual corporations. The findings contained in the report led to the renaming of Post Office TelecommunicationsPost Office Telecommunications
Post Office Telecommunications was set up as a separate department of the UK Post Office, in October 1969. The Post Office Act of that year was passed to provide for greater efficiency in post and telephone services; rather than run a range of services, each organisation would be able to focus on...
as British Telecom in 1980, although it remained part of the Post Office.
The British Telecommunications Act, 1981 transferred the responsibility for telecommunications services from the Post Office, creating two separate corporations, Post Office Ltd.
Post Office Ltd.
Post Office Ltd is a retail post office company in the United Kingdom that provides a wide range of products including postage stamps and banking to the public through its nationwide network of post office branches.-Structure:Post Office Ltd...
and British Telecom. At this time the first steps were taken to introduce competition into the UK telecommunications industry. In particular, the Act empowered the Secretary of State for Trade and Industry, as well as British Telecom, to license other operators to run public telecommunications systems. Additionally, a framework was established which enabled the Secretary of State to set standards with the British Standards Institution (BSI) for apparatus supplied to the public by third parties, and had the effect of requiring British Telecom to connect approved apparatus to its systems.
The Secretary of State made use of these new powers and began the process of opening up to and the apparatus supply market, where a phased programme of liberalisation was started in 1981. In 1982, a licence was granted to Cable & Wireless to run a public telecommunications network through its subsidiary, Mercury Communications.
19821984: Privatisation of British Telecom
On 19 July 1982, the Government formally announced its intention to privatise British Telecom with the sale of up to 51 per cent of the company's shares to private investors. This intention was confirmed by the passing of the Telecommunications Act, 1984, which received Royal Assent on 12 April that year. The transfer to British Telecommunications plc of the business of British Telecom, the statutory corporation, took place on 6 August 1984 and, on 20 November 1984, more than 50 per cent of British Telecom shares were sold to the public. At the time, this was the largest share issue in the world.The new legislation had to enable British Telecom to become more responsive to competition in the UK and to expand its operations globally. Commercial freedom granted to British Telecom allowed it to enter into new joint ventures and, if it so decided, to engage in the manufacture of its own apparatus.
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. Substantially all the government's remaining shares were sold in a third flotation in July 1993, raising £5 billion for the Treasury and introducing 750,000 new shareholders to the company.
The 1984 Act also abolished British Telecom’s 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. It now required a licence in the same way as any other telecommunications operator. The principal licence granted to British Telecom laid down strict and extensive conditions affecting the range of its activities, including those of manufacture and supply of apparatus.
19831991: Open telecommunications
The next major development for British Telecom, and a move towards a more open market in telecommunications, occurred in 1991. On 5 March, the Government's White PaperWhite paper
A white paper is an authoritative report or guide that helps solve a problem. White papers are used to educate readers and help people make decisions, and are often requested and used in politics, policy, business, and technical fields. In commercial use, the term has also come to refer to...
, Competition and Choice: Telecommunications Policy for the 1990s, was issued. In effect, it ended the duopoly which had been shared by British Telecom and Mercury Communications in the UK since November 1983 and the build up to privatisation. The new, more open and fairer policy, enabled customers to acquire telecommunications services from competing providers using a variety of technologies. Independent 'retail' companies were 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 enabling the company to compete freely and more effectively by offering flexible pricing packages to meet the needs of different types of customer.
1991–2001: Rebranding
On 2 April 1991, the company unveiled a new trading name, BT, a new corporate identity and a new organisational structure. This structure focused on specific market sectors, reflecting the needs of different customers – the individual, the small business or the multinational corporation. The reorganisation was named Project Sovereign to reflect the company’s commitment to meetings customers’ needs – ‘the customer is King’. Together with a succession of strategic alliances with telecommunications companies worldwide, these changes gave BT the means to expand into overseas markets.19941997: Concert Communications Services
In June 1994, BT and MCI Communication Corporation, the second largest carrier of long distance telecommunications services in the US, launched Concert Communications Services, 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. On 3 November 1996, BT and MCI announced 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. As part of the alliance BT acquired a 20 per cent holding in MCI. Nevertheless, following US carrier WorldCom's rival bid for MCI on 1 October 1997, BT ultimately decided in November, to sell its stake in MCI to WorldCom for $7 billion. The deal with WorldCom resulted in a profit of more than $2 billion on BT's original investment in MCI, with an additional $465 million severance fee for the breakup of the proposed merger.19982005: Concert
In July 1998, BT announced another global venture with the formation of a 50:50 business with AT&T. The new company, Concert, was launched in November 1999 to serve the needs of multinational companies and the international calling needs of individuals and businesses. In October 2001, following a downturn in the global telecommunications market, it was announced that BT and AT&T were to unwind Concert, returning its businesses, customer accounts and networks to the two parent companies (this was completed in April 2002).In December 2000, following modifications to BT’s licence in April 2000, BT offered local loop unbundling (LLU) to other telecommunications operators, enabling them to use BT’s copper local loops (the connection between the customer’s premises and the exchange) to connect directly with their customers. By the end of August 2005, 105,055 lines had been unbundled.
19852005: O2
In 1985, Cellnet was launched as a subsidiary of Telecom Securicor Cellular Radio Limited, a 60:40 venture between British Telecommunications and Securicor respectively.In 1999, BT purchased Securicor's shares in Cellnet for £3.15 billion, Securicor originally invested £4 million in Cellnet in 1983, the company was later rebranded as BT Cellnet, and it became a part of BT Wireless, a group of subsidiary companies owned by BT.
In October 2001, at a general meeting held in Birmingham
Birmingham
Birmingham is a city and metropolitan borough in the West Midlands of England. It is the most populous British city outside the capital London, with a population of 1,036,900 , and lies at the heart of the West Midlands conurbation, the second most populous urban area in the United Kingdom with a...
, 4.297 billion British Telecommunications shares voted in favour of the demerger, and 0.67 million voted against. In , BT Cellnet demerged from BT and was relaunched on as O2.
In February 2004, the company was subject to rumours of take-over bids from KPN
KPN
KPN is a Dutch landline and mobile telecommunications company, including both 2G and 3G mobile operations...
, the Dutch telecommunications group though these never came to fruition. In 2005 rumours of KPN (and several other international network operators) bidding for the various branches of O2 persisted, though following the company's posting of better than expected results so soon after demerging some speculation shifted to O2 itself making bids for other businesses.
In March 2005, the company underwent a corporate reorganization, that saw mmO2 plc being de-listed from the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
and acquired (via a share swap) by a new company, O2 plc, which was listed on the London Stock Exchange in its place. The summer of 2005 saw the company under threat of crippling strike action
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...
by Communication Workers Union members following disputes over pay and remuneration, though unrelated to earlier job losses as part of the reorganization. This was resolved without strikes taking place after several months of negotiations between the company and the trade union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
.
20012003: dot.com crash and reorganisation
Following the global stock market based dot com crash, the group undertook a major board restructuring and asset sale to address its debt pile. In May 2001, BT announced a three for ten rights issue to raise £5.9 billion – still the UK's largest ever rights issue – and the sale of Yell GroupYell Group
Yell Group plc is a multinational directories company headquartered in Reading, United Kingdom. As well as the United Kingdom, it has operations in the United States, Spain and some countries in Latin America...
, the international directories and associated e-commerce business for £2.14 billion. Both activities were completed in June 2001. The group also sold its property portfolio to JV property company Telereal
Telereal Trillium
Telereal Trillium Ltd is a commercial property management and investment company, headquartered in central London. It is wholly owned by the Pears family, via the William Pears Group and family trust-based holdings.-History:...
.
20032004: Brand refresh
In April 2003, BT unveiled its current corporate identity and brand values. Reflecting the aspirations of a technologically innovative future, the connected world is designed to embody BT’s five corporate values: trustworthy, helpful, inspiring, straightforward, heart.The Communications Act, 2003 which came into force on 25 July 2003 introduced a new industry regulator, the Office of Communications (Ofcom
Ofcom
Ofcom is the government-approved regulatory authority for the broadcasting and telecommunications industries in the United Kingdom. Ofcom was initially established by the Office of Communications Act 2002. It received its full authority from the Communications Act 2003...
), to replace the Office of Telecommunications (Oftel
Oftel
Oftel has been superseded as the British telecommunications regulator by Ofcom .----The Office of Telecommunications was a department in the United Kingdom government, under civil service control, charged with promoting competition and maintaining the interests of consumers in the UK...
). It also introduced a new regulatory framework. The licensing regime was replaced by a general authorisation for companies to provide telecommunications services subject to general conditions of entitlement and, in some instances, specific conditions. Under a specific condition BT retained its universal service obligation (USO) for the UK, excluding the Hull area. The USO included connecting consumers to the fixed telephone network, schemes for consumers with special social needs, and the provision of call box services.
In the summer of 2004, BT launched Consult 21, an industry consultation for BT’s 21st century network (21CN) programme. 21CN is a next generation network transformation, due for completion by end 2010. Using internet protocol technology, 21CN will replace the existing networks and communications from any device such as mobile phone, PC, PDA or home phone, to any other device.
2005: Openreach
Openreach provides provision and repair in the "last mile" of copper wire. Formed from 25,000 engineers previously employed by BT's Retail and Wholesale divisions. It is designed to ensure that other communications providers (CPs) have exactly the same operational conditions as parts of the BT group. Opened for business on 11 January 2006, it reports directly into the BT chief executive.
2005: Global expansion
In 2005, BT made a number of important acquisitions.In February 2005, BT acquired El Segundo, California
El Segundo, California
El Segundo is a city in Los Angeles County, California, United States. Located on the Santa Monica Bay, it was incorporated on January 18, 1917, and is one of the Beach Cities of Los Angeles County and part of the South Bay Cities Council of Governments...
-based telecoms giant Infonet (now re-branded BT Infonet), giving BT access to new geographies.
It also acquired the second largest telecoms operator in the Italian business market, Albacom.
In April 2005, it bought Radianz from Reuters (now rebranded as BT Radianz), which expanded BT's coverage, provided BT with more buying power in certain countries.
2006present: Recent developments
In August 2006 BT acquired online electrical retailer Dabs.comDabs.com
dabs.com is an e-commerce retailer in the United Kingdom. It is one of the UK's largest internet retailers of IT and technology products. dabs.com was founded in Bolton by David Atherton and Bruce Smith in 1987; Dabs is an acronym of the initials of the founders' names...
for £30.6 million. The BT Home Hub
BT Home Hub
The BT Home Hub is a wireless residential gateway router distributed by BT. It is based on the Wi-Fi 802.11n standard, and is also backwards compatible with 802.11g and 802.11b. All Models of the Home Hub prior to the Home Hub 3.0 support VoIP Internet calls via BT's Broadband Talk service and are...
manufactured by Inventel
Inventel
Inventel is a major French company involved in consumer electronics and communication systems. Founded in 1990 in Paris by Jacques Lewiner and Eric Carreel, cofounder of Withings, the company has been acquired by Thomson SA, today known as Technicolor, in 2005....
was also launched in June 2006.
In October 2006 BT confirmed that it would be investing 75% of its total capital spending, put at £10 billion over five years, in its new Internet Protocol
Internet Protocol
The Internet Protocol is the principal communications protocol used for relaying datagrams across an internetwork using the Internet Protocol Suite...
(IP) based 21st century network
BT 21CN
The 21st Century Network programme is the network transformation project of the UK telecommunications company BT Group plc for data and voice. It had been intended to move BT's telephone network from the present AXE/System X Public Switched Telephone Network to an Internet Protocol system...
(21CN). Annual savings of £1 billion per annum are expected when the transition to the new network is complete in 2010, with over 50% of its customers transferred by 2008. That month the first customers on to 21CN was successfully tested at Adastral Park
Adastral Park
Adastral Park is a science campus based at Martlesham Heath near Ipswich in the English county of Suffolk.When the site opened it was known as the Post Office Research Station, but it was subsequently renamed BT Research Laboratories or BT Labs and later Adastral Park to reflect an expansion in the...
in Suffolk.
In January 2007, BT acquired Sheffield based ISP, PlusNet
PlusNet
Plusnet is an Internet Service Provider based in Sheffield, South Yorkshire, England. Plusnet was floated on the Alternative Investment Market in July 2004, making them a Public limited company . It has been owned since 30 January 2007 by BT Group, but operates as a separate business...
plc, adding an additional 200,000 customers. BT stated that PlusNet will continue to operate separately out of its Sheffield head-office.
On 1 February 2007 BT announced agreed terms to acquire International Network Services Inc. (“INS”), an international provider of IT consultancy and software. This increases BT presence in North America enhancing BT's consulting capabilities.
On 20 February 2007 Sir Michael Rake, then chairman of accountancy firm KPMG
KPMG
KPMG is one of the largest professional services networks in the world and one of the Big Four auditors, along with Deloitte, Ernst & Young and PwC. Its global headquarters is located in Amstelveen, Netherlands....
International, would succeed Sir Christopher Bland, who stepped down in September of that year.
On 20 April 2007 BT acquired Comsat
COMSAT
The Communications Satellite Corporation is a global telecommunications company, based in the USA, and with branches in Brazil, Argentina, Colombia, Mexico, Peru, Venezuela and several other countries in the Americas. It is present also in Turkey...
International which provides network services to the South American corporate market.
On 1 October 2007 BT purchased Chesterfield based Lynx Technology which has been around since 1973.
BT acquired Wire One Communications in June 2008 and folded the company into BT Conferencing, its existing conferencing unit, as a new video business unit
In July 2008, BT acquired the online business directory firm Ufindus for £20 million in order to expand its position in the local information market in the UK..
On 28 July 2008, BT acquired Ribbit
Ribbit (telecommunications company)
Ribbit is a telecommunications company based in Mountain View, California. It was acquired by BT Group on 2008-07-29 for $105 million.On August 10, 2011, Ribbit announced it was closing most of its external-facing operations and developer program within a couple of months.The company’s goal is to...
, of Mountain View, California, "Silicon Valley's First Phone Company." Ribbit provides Adobe Flash
Adobe Flash
Adobe Flash is a multimedia platform used to add animation, video, and interactivity to web pages. Flash is frequently used for advertisements, games and flash animations for broadcast...
/Flex
Adobe Flex
Adobe Flex is a software development kit released by Adobe Systems for the development and deployment of cross-platform rich Internet applications based on the Adobe Flash platform...
APIs, allowing web developers to incorporate telephony features into their Software as a Service
Software as a Service
Software as a service , sometimes referred to as "on-demand software," is a software delivery model in which software and its associated data are hosted centrally and are typically accessed by users using a thin client, normally using a web browser over the Internet.SaaS has become a common...
(SaaS) applications.
On 1 April 2009 BT Engage IT is created from the unclean merger of two previous BT acquisitions Lynx Technology and Basilica.
Apart from the name change not much else changes in operations for another 12 months.
On 14 May 2009 BT said it was cutting up to 15,000 jobs in the coming year after it announced its results for the year to 31 March 2009.
In July 2009 BT offered workers a long holiday for an up front sum of 25% of their annual wage or a one-off payment of £1000 if they agree to go part time.
On 5 October 2009 Martin Balaam replaces Nick Gorringe as managing director of struggling division BT Engage IT.
Operations
BT runs the telephone exchange
Telephone exchange
In the field of telecommunications, a telephone exchange or telephone switch is a system of electronic components that connects telephone calls...
s, trunk network and local loop
Local loop
In telephony, the local loop is the physical link or circuit that connects from the demarcation point of the customer premises to the edge of the carrier or telecommunications service provider's network...
connections for the vast majority of British fixed-line telephones. Currently BT is responsible for approximately 28 million telephone lines in the UK. Apart from Kingston Communications
Kingston Communications
KCOM Group , formerly known as Kingston Communications, is a UK communications and IT services provider. Its headquarters is in Kingston upon Hull, East Riding of Yorkshire, where subsidiary business unit KC serves local residents and businesses with Internet and telephony services...
, which serves Kingston upon Hull, BT is the only UK telecoms operator to have a Universal Service Obligation
Universal service
Universal service is an economic, legal and business term used mostly in regulated industries, referring to the practice of providing a baseline level of services to every resident of a country...
(USO) which means it must provide a fixed telephone line to any address in the UK. It is also obliged to provide public call boxes.
BT's businesses are operated under special government regulation by the British telecoms regulator Ofcom
Ofcom
Ofcom is the government-approved regulatory authority for the broadcasting and telecommunications industries in the United Kingdom. Ofcom was initially established by the Office of Communications Act 2002. It received its full authority from the Communications Act 2003...
(formerly Oftel
Oftel
Oftel has been superseded as the British telecommunications regulator by Ofcom .----The Office of Telecommunications was a department in the United Kingdom government, under civil service control, charged with promoting competition and maintaining the interests of consumers in the UK...
). BT has been found to have Significant Market Power in some markets following Market Reviews by Ofcom. In these markets, BT is required to comply with additional obligations such as meeting reasonable requests to supply services and not to discriminate.
As well as continuing to provide service in those traditional areas in which BT has an obligation to provide services or is closely regulated, BT has expanded into more profitable products and services where there is less regulation. These are principally, broadband
Broadband
The term broadband refers to a telecommunications signal or device of greater bandwidth, in some sense, than another standard or usual signal or device . Different criteria for "broad" have been applied in different contexts and at different times...
internet service and bespoke
Bespoke
Bespoke is a term employed in a variety of applications to mean an item custom-made to the buyer's specification...
solutions in telecommunications and information technology.
BT Group is organised into the following business divisions:
- BT RetailBT RetailBT Retail is the consumer sales arm of Britain's BT Group.BT Retail is responsible for selling PSTN, BT Total Broadband, BT Vision, etc to consumers and end business users...
: Retail telecoms services to consumers - BT WholesaleBT WholesaleBT Wholesale is a division of BT Group responsible for the wholesale leasing of PSTN lines, broadband services and other telephony services to retail customers such as BT Retail, Vodafone and Carphone Warehouse.-External links:*...
: Wholesale telecoms core trunk network - Openreach: fenced-off wholesale division, tasked with ensuring that all rival operators have equality of access to BT's own local network
- BT Global ServicesBT Global ServicesBT Global Services is a division of United Kingdom Telecommunications operator BT Group. It delivers a combination of communications and IT services to over 10,000 organisations and governments worldwide. Its customers include over 25% of the global Fortune 500 and it is the largest supplier of...
: Business services and solutions (formerly BT Ignite and BT Syntegra) - BT Exact / One IT: used to handle consultancy and internal IT. Now been replaced by BT Innovate and Design.
- Group operations: handles security, research and developmentBT ResearchBT Research is part of the BT Innovate & Design division of BT Group, a provider of communications solutions and services operating in 170 countries....
, and other functions for BT Group Plc such as legal services
From 1 July 2007 two additional divisions were put in place:-
- BT Operate took responsibility from BT Wholesale for the roll-out and maintenance of the group's new IP based fixed-line network, known as 21st Century NetworkBT 21CNThe 21st Century Network programme is the network transformation project of the UK telecommunications company BT Group plc for data and voice. It had been intended to move BT's telephone network from the present AXE/System X Public Switched Telephone Network to an Internet Protocol system...
(21C). - BT Innovate and Design pulled together IT designers from BT Retail, BT Wholesale, BT Global Services and OneIT to design services on the 21C network.
Financial performance
| Year ending | Turnover (£m) | Profit/(loss) before tax (£m) | Net profit/(loss) (£m) | Basic eps Earnings per share Earnings per share is the amount of earnings per each outstanding share of a company's stock.In the United States, the Financial Accounting Standards Board requires companies' income statements to report EPS for each of the major categories of the income statement: continuing operations,... (p) |
|---|---|---|---|---|
| 31 March 2010 | 20,911 | 1,007 | 1,029 | 13.3 |
| 31 March 2009 | 21,390 | (134) | (81) | 3.2 |
| 31 March 2008 | 20,704 | 1,976 | 1,738 | 21.5 |
| 31 March 2007 | 20,223 | 2,484 | 2,852 | 34.4 |
| 31 March 2006 | 19,514 | 2,633 | 1,644 | 19.5 |
| 31 March 2005 | 18,429 | 2,693 | 1,539 | 18.1 |
| 31 March 2004 | 18,519 | 1,945 | 1,414 | 16.4 |
| 31 March 2003 | 18,727 | 3,157 | 2,702 | 31.4 |
| 31 March 2002 | 18,447 | 1,461 | 1,008 | 12.1 |
| 31 March 2001 | 17,141 | (1,031) | (1,875) | (25.8) |
| 31 March 2000 | 18,715 | 2,942 | 2,055 | 31.7 |
| 31 March 1999 | 16,953 | 4,295 | 2,983 | 46.3 |
| 31 March 1998 | 15,640 | 3,214 | 1,702 | 26.6 |
| 31 March 1997 | 14,935 | 3,203 | 2,077 | 32.8 |
| 31 March 1996 | 14,446 | 3,019 | 1,986 | 31.6 |
| 31 March 1995 | 13,893 | 2,662 | 1,731 | 27.8 |
| 31 March 1994 | 13,675 | 2,756 | 1,767 | 28.5 |
| 31 March 1993 | 13,242 | 1,972 | 1,220 | 19.8 |
| 31 March 1992 | 13,337 | 3,073 | 2,044 | 33.2 |
After a pay rise of over 40%, BT's chief financial officer, Hanif Lalani, became one of the very few UK financial directors whose annual remuneration exceeds £1 million. He became CEO of BT Global Services in October 2008 and was replaced as BT Group CFO by Tony Chanmugam on 1 December 2008.
In recent years, the strategy of BT plc has been to reduce its dependence on traditional voice revenues and instead obtain an increasing portion of its turnover from so-called New Wave revenues. At the heart of this strategy is BT Global Services, which has won many significant contracts in the commercial and public sectors, in part through its portrayal as a "momentum story".
Marketing
The Telecommunications Act 1984 set the framework for a competitive market for telecoms services by abolishing BT's exclusive right to provide services. In the early 1990s the market was opened up and a number of new national Public Telecommunications Operators (PTOs) were given licences. This ended the duopoly that had existed in the 1980s when only BT and Mercury were licensed to provide fixed line telecom networks in the UK.Pension fund
BT has the largest defined benefit pension planDefined benefit pension plan
In economics, a defined benefit pension plan is a major type of pension plan in which an employer promises a specified monthly benefit on retirement that is predetermined by a formula based on the employee's earnings history, tenure of service and age, rather than depending on investment returns...
of any UK public company. The trustees valued the scheme at £36.7 billion at the end of 2010 ; An actuarial valuation valued the deficit of the scheme at £9.043 billion as of 31 December 2008.
However following a change in the regulations governing inflation index linking, the deficit was estimated at £5.2 billion in November 2010.
BT and the Trustee have agreed a 17 year recovery plan with the first three years’ payments amounting to £525mm. As of 2013 average annual payments have been estimated at £533MM. The next triennial valuation is scheduled for December 2011.
BT’s pension obligation is derived from two pension plans: BTPS, the company’s defined-benefit pension scheme which was closed in 2001, and the BT Retirement Saving Scheme (BTRSS), which was set up to replace the BTPS and is a defined-contribution retirement plan.
Environment
In 2004, the BT Group signed the world's largest renewable energy deal with npowerNpower (UK)
RWE Npower plc is a UK-based electricity and gas supply generation company, formerly known as Innogy plc. As Innogy plc it was listed on the London Stock Exchange and was a constituent of the FTSE 100 Index...
and British Gas
British Gas
British Gas is the name of several companies:* British Gas plc, the former gas monopoly in the United Kingdom and its successor companies** Centrica, which has the rights to the British Gas name in the UK...
, and now all of their exchanges, satellite networks and offices are powered by renewable energy. BT is a member of the Corporate Leaders Group on Climate Change. They signed a letter urging the government to do more to tackle this problem. Janet Blake, head of global corporate social responsibility (CSR) at BT, says that she would like to see incentives that find ways of rewarding those companies that focus on climate change by making investments in green business models.
BT has made it clear that it has an ambitious plan to reduce carbon dioxide emissions. Its strategy includes steps to reduce the company's carbon footprint as well as those of customers, suppliers and employees. BT has actually pledged to achieve an 80% reduction by the year 2016, which will require further efficiency improvements.
Since June 2009 BT has been one of the founding members of the Ellen MacArthur Foundation
Ellen MacArthur Foundation
The Ellen MacArthur Foundation is a registered charity dedicated to promoting sustainability and the circular economy.The key aims of the charity are to:*Provide a framework for inspirational content, through the medium of education programmes....
.
World Wide Web hyperlink patent
In 2001 BT discovered it owned a patentPatent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
which it believed gave it patent rights on the use of hyperlink
Hyperlink
In computing, a hyperlink is a reference to data that the reader can directly follow, or that is followed automatically. A hyperlink points to a whole document or to a specific element within a document. Hypertext is text with hyperlinks...
technology on the World Wide Web
World Wide Web
The World Wide Web is a system of interlinked hypertext documents accessed via the Internet...
. The corresponding UK patent had already expired, but the US patent was valid until 2006. Opponents of BT's claim held that the patent had never been valid, due to prior art
Prior art
Prior art , in most systems of patent law, constitutes all information that has been made available to the public in any form before a given date that might be relevant to a patent's claims of originality...
by both Douglas Engelbart
Douglas Engelbart
Douglas Carl Engelbart is an American inventor, and an early computer and internet pioneer. He is best known for his work on the challenges of human-computer interaction, resulting in the invention of the computer mouse, and the development of hypertext, networked computers, and precursors to GUIs...
and Ted Nelson
Ted Nelson
Theodor Holm Nelson is an American sociologist, philosopher, and pioneer of information technology. He coined the terms "hypertext" and "hypermedia" in 1963 and published it in 1965...
's Project Xanadu
Project Xanadu
Project Xanadu was the first hypertext project, founded in 1960 by Ted Nelson. Administrators of Project Xanadu have declared it an improvement over the World Wide Web, with mission statement: "Today's popular software simulates paper...
. Nevertheless on 11 February 2002, BT began a court case relating to its claims in a U.S. federal court against the Internet service provider
Internet service provider
An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
Prodigy Communications Corporation
Prodigy (ISP)
Prodigy Communications Corporation was an online service that offered its subscribers access to a broad range of networked services, including news, weather, shopping, bulletin boards, games, polls, expert columns, banking, stocks, travel, and a variety of other features.Initially subscribers...
. In the case British Telecommunications Plc. v. Prodigy
British Telecommunications Plc. v. Prodigy
British Telecommunications Plc. v. Prodigy was a patent infringement case which determined whether a patent related to communications between central computers and their clients was infringed by Internet service providers through hyperlinks...
, the United States District Court for the Southern District of New York
United States District Court for the Southern District of New York
The United States District Court for the Southern District of New York is a federal district court. Appeals from the Southern District of New York are taken to the United States Court of Appeals for the Second Circuit The United States District Court for the Southern District of New York (in case...
ruled on 22 August 2002 that the BT patent was not applicable to Web technology and granted Prodigy's request for summary judgement of non-infringement. The issue of prior art was thus not addressed.
Behavioural targeting
In early 2008 it was announced that BT had entered into a contract (along with Virgin MediaVirgin Media
Virgin Media Inc. is a company which provides fixed and mobile telephone, television and broadband internet services to businesses and consumers in the United Kingdom...
and Talk Talk) with the spyware
Spyware
Spyware is a type of malware that can be installed on computers, and which collects small pieces of information about users without their knowledge. The presence of spyware is typically hidden from the user, and can be difficult to detect. Typically, spyware is secretly installed on the user's...
company Phorm
Phorm
Phorm, formerly known as 121Media, is a Delaware, United States-based digital technology company known for its advertising software. Founded in 2002, the company originally distributed programs that were considered spyware, from which they made millions of dollars in revenue...
(responsible under their 121Media guise for the Apropos rootkit
Rootkit
A rootkit is software that enables continued privileged access to a computer while actively hiding its presence from administrators by subverting standard operating system functionality or other applications...
) to intercept and analyse their users' click-stream data and sell the anonymised aggregate information as part of Phorm's OIX advertising service. The practice, known as "behavioural targeting" and condemned by critics as "data pimping
Data pimping
Data pimping is a pejorative term used to describe the act of an Internet service provider profiting from the sale of its users' personal clickstream data. The practice of data pimping first appeared through British Telecom's secret, allegedly illegal trials of the controversial Webwise system...
", came under intense fire from various internet communities and other interested-parties who believe that the interception of data without the consent of users and web site owners is illegal under UK law (RIPA). At a more fundamental level, many have argued that the ISPs and Phorm have no right to sell a commodity (a user's data, and the copyright content of web sites) to which they have no claim of ownership. In response to questions about Phorm and the interception of data by the Webwise system Sir Tim Berners-Lee, credited as the creator of the World Wide Web, indicated his disapproval of the concept and is quoted as saying that his data and web history: