BT Group

The trunk network was unified under GPO control in 1896 and the local distribution network in 1912. A few municipally owned services remained outside of GPO control. These were Kingston upon Hull, Portsmouth and Guernsey. Hull still retains an independent operator, Kingston Communications, though it is no longer municipally controlled. Assets of the National Telephone Company were acquired by the UK Government to form Post Office Telephones in late 1911. Post Office engineers in the inter-war period had considerable expertise in both telecommunications and hearing assistive devices. Transistors were invented by Bell Telephone Laboratories in the US in 1948; however, it was not until the mid-1960s that a transistorised oscillator was introduced to make the calling sound on a telephone in the UK.

Post Office Telecommunications

In 1969, the GPO, a government department, became the Post Office, a nationalised industry separate from government. Post Office Telecommunications was set up as a division of the Post Office in October 1969. The Post Office Act 1969 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 their respective service, with dedicated management. By law, the Post Office retained the exclusive right to operate the UK national telecom network (although, since 1914 had licensed Hull City Council to operate its own local telephone network, Kingston Communications).

The 1970s was a period of great expansion for the Post Office. Most exchanges were modernised and expanded, and many services, such as STD and international dialling were extended. By the early 1970s, subscribers in most cities could dial direct to Western Europe, the US, and Canada; by the end of the decade, most of the world could be dialled direct, and the Post Office had launched Confravision, an early videoconferencing system linking studios in multiple cities. The System X digital switching platform was developed, and the first digital exchanges began to be installed. The Post Office also procured their own fleet of vans, based on the Commer FC model. Post Office Telecommunications researched and implemented data communications using packet switching in the 1970s, resulting in the EPSS, International Packet Switched Service, and Packet Switch Stream.

British Telecom

In 1979, the Conservatives decided that telecommunications should be fully separated from the Post Office. Hence, the British Telecom brand was introduced in 1980. On 1 October 1981, this became the official name of Post Office Telecommunications, which became a state-owned corporation independent of the Post Office under the provisions of the British Telecommunications Act 1981. In 1982, BT's monopoly on telecommunications was broken with the granting of a licence to Mercury Communications.

Privatisation

On 19 July 1982, the Government announced its intention to sell shares in British Telecom to the public. On 1 April 1984, British Telecommunications was incorporated as a public limited company (plc) in anticipation of the passing of the Telecommunications Bill. This Bill received royal assent on 12 April as the Telecommunications Act 1984, and the transfer to British Telecommunications plc from British Telecom as a statutory corporation of its business, its property, its rights and liabilities took place on 6 August 1984. The remainder of the statutory corporation British Telecom was dissolved in 1994.

Initially, all shares in the new plc were owned by the Government. In November 1984, 50.2% of the new company was offered for sale to the public and employees. Shares were listed in London, New York, and Toronto, and the first day of trading on was 3 December 1984. The Government sold half its remaining interest in December 1991 and the other half in July 1993. 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. The company changed its trading name to "BT" on 2 April 1991. In 1996, Peter Bonfield was appointed CEO and chairman of the executive committee, promising a "rollercoaster ride".

Diversification

In the early 1980s, BT Merlin was established as a business unit of British Telecom, at first to sell products such as phone systems to small businesses. In 1983, the growing "office automation" market was addressed through Merlin-branded desktop computers made by ICL, with built-in modems to communicate over the phone network. Later products included the Merlin Tonto – developed by ICL from the Sinclair QL home computer – and the Merlin M4000, a rebadged Logica computer.

In the 1990s, BT entered the Irish telecommunications market through a joint venture with the Electricity Supply Board, the Irish state-owned power provider. This venture, entitled Ocean, found its main success through the launch of Ireland's first subscription-free dial-up ISP, oceanfree.net. As a telecoms company, it found much less success, mainly targeting corporate customers. BT acquired 100% of this venture in 1999. Over the period of 1980 to 2000, BT and other providers adopted Internet product strategies when it became commercially advantageous.

MCI

In June 1994, BT and MCI Communications launched Concert Communications Services, which was a $1 billion joint venture between the two companies. Its aim was to build a network that would provide easy global connectivity to multinational corporations. This alliance progressed further on 3 November 1996 when the two companies announced that they had agreed to a merger, creating a global telecommunications company called Concert plc. The proposal gained approval from the European Commission, the US Department of Justice, and the US Federal Communications Commission and looked set to proceed.

In light of pressure from investors reacting to the slide in BT's share price on the London Stock Exchange, BT reduced its bid price for MCI, releasing MCI from its exclusivity clause and allowing it to speak to other interested parties. On 1 October 1997, Worldcom made a rival bid for MCI which was followed by a counter-bid from GTE. BT sold its stake in MCI to Worldcom in 1998 for £4,159 million. As part of the deal, BT also bought out from MCI its 24.9% interest in Concert Communications, thereby making Concert a wholly-owned part of BT. The reaction to the failure of the deal in the City of London was critical of then Chairman Iain Vallance and CEO Peter Bonfield, and the lack of confidence from the failed merger led to their removal.

AT&T

In 1994, as the BT-owned Concert still wanted access to the North American market, it needed a new partner. An AT&T/BT option had been mooted in the past, but stopped on regulatory grounds due to their individual virtual monopolies in their home markets. By 1996, this had receded to the point where a deal was possible, and a deal was consummated in 1998. At its height, the Concert managed network was extensive. Although Concert continued signing customers, its rate of revenue growth slowed, so that in 1999 David Dorman was made CEO with a brief to revive it.

In late 2000, the BT and AT&T boards fell-out, partly due to each partner's excess debt and the resulting board room clear-outs, partly due to Concert's extensive annual losses. AT&T recognized that Concert was a threat to its ambitions if left intact, and so negotiated a deal where Concert was split in two in 2001: North America and Eastern Asia went to AT&T, the rest of the world and $400M to BT. BT's remaining Concert assets were merged into its BT Ignite, later BT Global Services group.

BT Ireland

In 2000, BT acquired Esat Telecom Group plc, and all its subsidiary companies, and Ireland On Line. It also purchased Telenor's minority shareholding in Esat Digifone. The Esat Telecom Group was split in two with the landline and internet operations were combining with Ocean to become part of BT Ignite. Esat Group was renamed Esat BT in July 2002, and eventually BT Ireland in April 2005. Esat Digifone became part of BT Wireless, before being spun off into a separate independent company mmo2 plc (now Telefónica Europe). EsatBT installed the first DSL lines in Ireland, to try and compete heavily with former state telecoms company Eircom and operate one exchange, in Limerick.

2001 debt crisis, sale, and demerger

By 2001, BT had a debt of £30 billion, much of which was acquired during the bidding round for the 3rd generation mobile telephony (commonly known as 3G) licences. It had also failed in its series of proposed global mergers, and the funds flowing from its then virtual monopoly of the UK market place had been largely removed. It was also headed by two executives who had little support from the London Stock Exchange, particularly in light of a 60% drop in share price in sixteen months.

Philip Hampton joined as CFO, and in April 2001 Sir Iain Vallance was replaced as chairman by recognised turn around expert Sir Christopher Bland. In May 2001, BT carried out corporate Europe's largest ever rights issue, allowing it to raise £5.9 billion. A few days before, it sold stakes in Japan Telecom, in mobile operator J-Phone Communications, and in Airtel of India to Vodafone. In June 2001, BT's directory business was sold as Yell Group to a combination of private equity firms Apax Partners and Hicks, Muse, Tate & Furst for £2.1 billion.

A demerger followed in November 2001, when the former mobile telecommunications business of BT, BT Cellnet, was hived off as a separate business named "mmO2". This included BT owned or operated networks in other countries, including BT Cellnet (UK), Esat Digifone (Ireland), and Viag Interkom (Germany). All networks now owned or operated by mmO2 (except Manx Telecom) were renamed as O2. The de-merger was accomplished via a share-swap, all British Telecommunications plc shareholders received one mmO2 plc and one BT Group plc (of which British Telecommunications is now a wholly owned subsidiary) share for each share they owned. British Telecommunications plc was de-listed on 16 November, and the two new companies started trading on 19 November.

Aftermath, 2001 to 2006

At the end of the series of sales, Sir Peter Bonfield resigned in October 2001. Bonfield was replaced by former Lucent CEO Ben Verwaayen. During Bonfield's tenure the share price went from £4 to £15, and back again to £5. Bonfield's salary to 31 March 2001 was a basic of £780,000 (increasing to £820,000) plus a £481,000 bonus and £50,000 of other benefits including pension. He also received a deferred bonus, payable in shares three years' later, of £481,000, and additional bonuses of £3.3 million. mmO2 plc was replaced by O2 plc in a further share-swap in 2005, and subsequently bought in an agreed takeover by Telefónica for £18 billion and delisted. In 2004, BT launched Consult 21, a consultation organisation that was to aid BT 21CN in the eventual conversion to digital telephony.

In 2004, BT was awarded the contract to deliver and manage N3, a secure and fast broadband network for the NHS National Programme for IT (NPfIT) program, on behalf of the English National Health Service (NHS). In 2005, BT made a number of acquisitions. In February 2005, BT acquired Infonet (now re-branded BT Infonet), a large telecoms company based in El Segundo, California, giving BT access to new geographies. It also acquired the Italian company Albacom. Then in April 2005, it bought Radianz from Reuters (now rebranded as BT Radianz), which expanded BT's coverage and provided BT with more buying power in certain countries.

In August 2006, BT acquired online electrical retailer Dabs.com 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 were expected when the transition to the new network was to have been completed in 2010, with over 50% of its customers to have been transferred by 2008. That month the first customers on to 21CN was successfully tested at Adastral Park in Suffolk.

2007 to 2012

In January 2007, BT acquired Sheffield-based ISP, PlusNet plc, adding 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. In February 2007, Sir Michael Rake succeeded Sir Christopher Bland. In April that year, they acquired COMSAT International, followed in October by the acquisition of Lynx Technology.

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 GB. 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.

In the early days of its fibre broadband rollout, BT said it would deliver fibre-to-the-premises (FTTP) to around 25% of the Country, with the rest catered for by the slower fibre-to-the-cabinet (FTTC), which uses copper wiring to deliver the final stretch of the connection. In 2014, with less than 0.7% of the company's fibre network being FTTP, BT dropped the 25% target, saying that it was "far less relevant today" because of improvements made to the headline speed of FTTC, which had doubled to 80 Mbit/s since its fibre broadband rollout was first announced. To supplement FTTC, BT offered an 'FTTP on Demand' product. In January 2015, BT stopped taking orders for the on-demand product.

On 1 April 2009, BT Engage IT was created from the merger of two previous BT acquisitions, Lynx Technology and Basilica. Apart from the name change not much else changed 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. Then 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 6 April 2011, BT launched the first online not-for-profit fundraising service for UK charities called BT MyDonate as part of its investment to the community. The service will pass on 100% of all donations made through the site to the charity, and unlike other services which take a proportion as commission and charge charities for using their services, BT will only pass on credit/debit card charges for each donation. The service allows people to register to give money to charity or collect fundraising donations. BT developed MyDonate with the support of Cancer Research UK, Changing Faces, KidsOut, NSPCC and Women's Aid.

2013 to 2020

In March 2013, BT was allocated 4G spectrum in the UK following an auction and assignment by Ofcom, after paying £201.5m. On 1 August 2013, BT launched its first television channels, BT Sport, to compete with rival broadcaster Sky Sports. Plans for the channels' launch came about when it was announced in June 2012 that BT had been awarded a package of broadcast rights for the Premier League from the 2013–14 to 2015–16 season, broadcasting 38 matches from each season. In February 2013, BT acquired ESPN Inc.'s UK and Ireland TV channels, continuing its expansion into sports broadcasting. ESPN America and ESPN Classic were both closed, while ESPN continued to be operated by BT. On 9 November 2013, BT announced it had acquired exclusive rights to the Champions League and Europa League for £897m, from the 2015 season, with some free games remaining including both finals.

On 1 November 2014, BT created a new central business services organisation to provide customer services and improve operational efficiency. On 24 November 2014, shares in BT rose considerably on the announcement that the company was in talks to buy back O2, while at the same time confirmed it was also in talks to acquire EE. BT subsequently entered into exclusive talks to buy EE for £12.5 billion on 15 December 2014 and confirmed on 5 February 2015, subject to regulatory approval. The deal combined BT's 10 million retail customers and EE's 24.5 million direct mobile subscribers. Deutsche Telekom would own 12% of BT, while Orange S.A. would own 4%.

In March 2015, BT launched a 4G service as BT Mobile BT Group CEO Gavin Patterson announced that BT plans to migrate all of its customers onto the IP network by 2025, switching off the company's ISDN network. On 15 January 2016, BT received approval by the Competition and Markets Authority to acquire EE. The deal was officially completed on 29 January 2016 with Deutsche Telekom then owning 12% of BT, while Orange S.A. owned 4%.

On 1 February 2016, BT announced a new organisational structure to take effect from April 2016 after acquiring EE. The EE brand, network and high street stores became a second consumer division, operating alongside BT Consumer to serve customers with mobile services, broadband and TV and continued to deliver the Emergency Services Network contract awarded to EE in late 2015. There was to be a new BT Business and Public Sector division with around £5bn of revenues to serve small and large businesses as well as the public sector in the UK and Ireland. It was to comprise the existing BT Business division along with EE's business division and those parts of BT Global Services that are UK focused. There will also be another new division; BT Wholesale and Ventures that will comprise the existing BT Wholesale division along with EE's MVNO business as well as some specialist businesses such as Fleet, Payphones and Directories. Gerry McQuade, Chief Sales and Marketing Officer, Business at EE, was to be its CEO.

Historical documents

Records of the Post Office Corporation (Telecommunications division) 1969–1981 and its predecessors (including Post Office Telegraph and Telephone Service 1864–1969 and some private telegraph and telephone companies) are Public Records, and are held by BT Archives.

Alleged complicity with drone strikes in Yemen and Somalia

In September 2012, BT entered into a $23 million deal with the US military to provide a key communications cable connecting RAF Croughton, a US military base on UK soil, with Camp Lemonnier, a large US base in Djibouti. Camp Lemonnier is used as a base for American drone attacks in Yemen and Somalia, and has been described by The Economist as "the most important base for drone operations outside the war zone of Afghanistan." Human rights groups including Reprieve and Amnesty International have criticised the use of armed drones outside declared war zones. Evidence produced by The Bureau of Investigative Journalism and Stanford University's International Human Rights & Conflict Resolution Clinic suggest that drone strikes have caused substantial civilian casualties, and may be illegal under international law.

In 2013, BT was the subject of a complaint by Reprieve to the Department of Business, Innovation and Skills under the OECD Guidelines for Multinational Enterprises, following their refusal to explain whether or not their infrastructure was used to facilitate drone strikes. The subsequent refusal of this complaint was appealed in May 2014, on the basis that the UK National Contact Point's decision did not follow the OECD Guidelines. The issue of bias was also raised, due to the appointment of Lord Ian Livingston as government minister for the department which was processing the complaint: Livingston had occupied a senior position at BT when the cable between RAF Croughton and Camp Lemonnier was originally built.

Overcharging

In February 2017, a review of the telecoms market by Ofcom found that BT's landline only contracts provided poor value to customers. Ofcom ordered BT to reduce their prices but stopped short of demanding that customers were compensated. In January 2021, Law firm Mishcon de Reya filed a claim with the Competition Appeal Tribunal against BT worth £600 million, accusing them of historic overcharging on landlines. The class action lawsuit claims BT have increased their prices for line-only services every year since 2009, whilst the wholesale cost for delivering these services has reduced. The claimants suggest that customers could be entitled to compensation of up to £500 each.

Bidding rules violation

In 2020, BT was fined £6.3m by the telecoms regulator Ofcom for violating the law on a large public sector deal in Northern Ireland. Under Ofcom's regulations, the BT network shall handle all wholesale customers similarly. In its report, Ofcom found that BT's network violated the rules by failing to supply Eir with the same details on its on-demand fibre-to-the-premises offering as its own rival team.

OFCOM fines for non-functioning 999 calls

On 25 June 2023, a "catastrophic failure" in BT's network resulted in nearly 14,000 attempted 999 emergency calls not being connected. Ofcom fined BT £17.5 million, citing the telecom giant's lack of preparedness and poorly documented backup procedures.