British Telecom and American Telephone and Telegraph have announced plans to dismantle their three-year-old joint venture Concert. Concert, which provides telecommunications services to multinationals, will be wound up in the first half of next year.
Shutting down Concert would mean the loss of 2,300 jobs, BT said, adding that the remaining 6,300 employees in the joint venture would join the work forces of British Telecom and AT&T.
BT said it would take a hit in the current quarter of £1.2 billion sterling because of today's decision. The companies will split assets and customers and continue to service their clients as BT and AT&T.
The Concert venture, unveiled to much fanfare in 1998 as a slick solution for multinationals needing sophisticated telecoms links, has proved a financial disappointment. Speculation about its imminent demise has been rife in the press for months. Concert is expected to post an operating loss of £550 million sterling this year, BT said.
BT executives sought to strike an upbeat note about the demise of Concert, saying it would leave the company better placed to deal with international customers on its own.
'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,' said BT chief executive Sir Peter Bonfield. 'Clearly there will be substantial costs associated with an unwind but this solution gives BT a better way forward than the status quo,' he added.
