Taken from the British Telecom Archives web site - with additions.

For BPO Telephone history - click here


The world's first commercial telegraph line, using equipment invented by William Fothergill Cooke and Charles Wheatstone of King's College, London, was built between Paddington and West Drayton.  It was working to Hanwell by 6th April and was completed to West Drayton on 9th July.

This was also the first commercial use of electricity.


Charles Wheatstone invented the first type printing telegraph.  This year he also proposed a time-division multiplex telegraph system.


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


The first telegraph cable was laid between England and France, this was also the first telegraph cable laid in the open sea and was laid by H.M. Tug 'Goliath' accompanied by H. M. Packet 'Widgeon'. It failed after only a few messages, but a successful cable was laid the following year.


An Act of Parliament gave the Postmaster-General the exclusive right to set up and operate inland telegraphs.


A second Act of Parliament allowed the Postmaster-General to take over the telegraphs from the private companies operating in the United Kingdom.


The Post Office took over the UK Telegraph Service by means of special Acts of Parliament in 1868 and 1869.  This was because the existing telegraph companies were only interested in the business centres of large cities.  State control was required to give a nation wide service.  The price for acquiring the four Telegraph companies was £10 Million.  Many of the Telegraph circuits were run along the railway tracks and allowed simplification of wayleaves.  In return for this simplification the Post Office allowed the Railway Companies free telegrams on Railway Business, a concession which continued until 1969.

7 Million Telegrams were sent in this year.  Twenty words cost 5p.


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

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


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

Sir William Thompson (later Lord Kelvin) exhibited Bell's telephone to the British Association for the Advancement of Science at Glasgow in September. He described it as "the greatest by far of all the marvels of the electric telegraph". 1877

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

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


Thomas Alva Edison invents the carbon transmitter for telephones.

In the Autumn of 1987 Bell stayed at Torr House, near Plymouth, whilst attending a meeting of the British Association for the Advancement of Science.  As a token of his appreciation he gave the Baylys family two telephones, which were installed, one in the house and one in the lodge.  These were both of the "Butter Stamp" type and now reside in Plymouth Museum.  These telephones were most certainly the first permanent telephone installation in Europe.


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

The Telephone Company Ltd (Bell's Patents) was formed to market Bell's patent telephones in Great Britain. The company was registered on 14th June with a capital of £100,000. Its premises were at 36 Coleman Street.  It had a capacity for 150 lines and opened with 7 or 8 subscribers.  One of the first telephone lines to be erected in the vicinity of London was from Hay's Wharf, south of the Thames, to Hay's Wharf Office on the north bank.

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

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

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

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

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

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


The Telephone Company Ltd (Bell's Patents) opened Britain's first public telephone exchange at 36 Coleman St, London and later opened another two exchanges towards the end of the year at 101 Leadenhall Street, EC2 and 3 Palace Chambers, Westminster, the number of subscribers totalling 200.

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

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

The Edison Telephone Company of London Ltd was registered on 2nd August with a capital of £200,000 to work the Edison telephone patents. The company's first exchange officially opened on 6 September at 11 Queen Victoria Street, London, with ten subscribers who used carbon transmitters and chalk receivers. By the end of the following February, when the company had another two exchanges in operation, it served 172 subscribers.  The annual tariff was £12 against £20 charged by the Bell Company.

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

This year, Mr. William Preece (later Sir William Preece) of the Post Office Engineering staff, when asked whether the telephone would be an instrument of the future which would be largely taken up by the public, replied "I think not". Questioned further he said "I fancy the descriptions we get of its use in America are a little exaggerated; but there are conditions in America which necessitate the use of instruments of this kind more than here. Here we have a superabundance of messengers, errand boys, and things of that kind".


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

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

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

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

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

After some litigation over patents, the Telephone Company Ltd and the Edison Telephone Company of London Ltd were amalgamated on 13th May to form the United Telephone Company of London Ltd (UTC) with a capital of £500,000. The new company, now controlling Bell's and Edison's patents, reflected the situation in the United States.  The yearly tariff rate of the newly formed company was £20.

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


The Government authorised the Post Office to offer the public telephone as well as the telegraph service.

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

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

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

The London and Globe Telephone Maintenance Company established to rival the UTC in London.

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


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

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

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

The Telephone Company of Ireland formed as a UTC subsidiary.


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

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

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


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

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

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

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

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

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

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

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

The Provincial Telephone Company was wound up having fulfilled its objectives


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

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

Charges for telegrams were reduced to six pence (just over 2p) for 12 words.

The South of England Telephone Company formed as a UTC subsidiary.


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

Dane Sinclair invented the automatic line selector which was installed at Coatbridge, near Glasgow.

In this year 50 million telegrams were sent compared with 33 million the previous year.


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


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


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

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

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


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


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

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

Continental telegraph "Cable Room" transferred to Central Telegraph Office.


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

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


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


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

78,839,600 telegrams dealt with in the UK.


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

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

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


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

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

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

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

London to Paris Multiplex installed.


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

The first Jersey telephone exchange was opened by the South Western and Wales Telephone company in 1888 at Minden Place, St. Helier. Service was suspended in 1891 and the company absorbed into the National Telephone Company in 1892. The NTCo reopened the exchange in 1895.  The PO operated the island's telephone service from 1912 until 1923 when the States of Jersey bought the system for £32,000. The telephone monopoly was transferred to the States in 1973. The telephone service was deregulated in 2003

First long distance cable laid between London to Birmingham was started in 1897 and finished in this year.  The cable was mainly used for telegraph  traffic, but was also used experimentally for telephony.


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

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

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

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


The first Central Battery exchange in Europe was opened in Telephone Avenue, Bristol. This development was of great benefit to individual telephone subscribers. The first telephones had a manual Local Battery System where one wire was used to connect the subscriber to the exchange, with the electrical circuit being completed by earth return. Subscribers called the exchange by magneto generator, and local batteries at their premises provided current for speech. Magneto generators were expensive and the local batteries which had to be kept near the telephone were bulky and prone to faults.

In the Central Battery System the whole energy required for signalling and speaking was drawn from one large battery at the exchange. The battery was common to all circuits requiring current and supplied all the needs of the exchange. The subscribers' magneto generator and primary battery were consequently no longer needed.

Marconi formed the International Marine Communications Company Ltd and built the wireless station at Poldhu, Cornwall, designed by John Ambrose Fleming (1849-1945).


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

The Postmaster-General and the National Telephone Company signed an agreement on 18th November to prevent unnecessary duplication of plant and wasteful competition in London. There was now free intercommunication between the two systems in London for the first time.   The agreement also provided for the purchase of the NTC's system on the expiry of its licence on 31st December 1911.

On 12th December, Guglielmo Marconi, transmitted the first radio signals across the Atlantic Ocean from Poldhu, Cornwall, UK to Signal Hill, Newfoundland, Canada.

The Corporation of Brighton and Corporation of Portsmouth were granted licences to operate telephone systems.


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

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

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

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

The Corporation of Swansea gained a licence and started operating a telephone system.


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

A telephone service was opened with Belgium.


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

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

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

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


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


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

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

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

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


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

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

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

The National Telephone Company's system had a net increase of 45,323 stations during the year 1906, bringing the total stations in service at 1st January 1907, to 407,736.


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


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


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

A trunk telephone cable was opened between Manchester and Liverpool.

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


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


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

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

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

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

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

Wooden telephone kiosks introduced.


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

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

The first long distance telephone cable in Europe was laid between Leeds and Hull.

A change was made in the preservation treatment of the poles, the "empty-cell," or Ruping, process being adopted as standard. In this process approximately 50 per cent of the creosote was recovered from the wood by the application of a vacuum immediately after injection, leaving the pole with 4 to 5lb of creosote per cubic foot. The main reason for the change was the direct saving in
creosote, but in addition the Rupingized poles were lighter, easier and cleaner to handle, and required less weathering before erection.


A junction telephone service was inaugurated between Liverpool and Manchester.

A submarine telephone cable was laid between Dover and Dunkirk.

Telephone service opened with Switzerland.

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

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

A Western Electric Company Rotary type automatic exchange was opened at Darlington for public service on 10th October and it had an initial capacity of 800 lines. It was similar to the Lorimer system in the use of power-driven selector switches, but it featured the 'Register', a device to receive the subscriber's signals from a rotary ten hole dial and to store them for subsequent control of the switches.

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


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

With the First World War telegraph traffic increased and 91 million messages were handled in the United Kingdom in this year.


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

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


A bomb dropped by enemy aircraft struck the Central Telegraph Office on 17th July. Damage was caused to the South East corner of the fourth floor. A section of the roof parapet fell down and killed a soldier on sentry duty in the street, but no Post Office people were injured. A journalist who witnessed the attack later claimed that the bombing of the CTO was 'the only instance of a direct hit by German raiders of an object they aimed at'.

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

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


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

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

A Siemens Brothers & Company type automatic exchange was opened at Grimsby on 14th September 1918. It was similar to the Strowger system in many respects, but differed in the form of line switch employed and because the connectors were controlled entirely by relays. The characteristic feature was the 'Preselector', a rotary line switch provided for each subscriber's line to find a disengaged trunk to a selector.
Further Siemens type exchanges were opened at Stockport on 23rd August 1919 and at Southampton on 30th June 1923, but the Post Office had decided on the Strowger system as its standard automatic exchange in 1922.

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

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

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

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

The Department moved to the Department of Trade and Industry in 1983, seen as a logical move given the Ministry's responsibility for telecommunications, information technology and innovation. The Department was re-titled the Radio Regulatory Division (RRD).
A further change of name occurred in 1986 when the Radio Regulatory Division became the Radiocommunications Division. Finally, the Division became the Radiocommunications Agency in 1990, under the Government's Next Steps programme.

Ancillary Phonogram equipment introduced.

Lead-covered paper-core aerial cable was introduced and this was attached to a steel suspension wire, as used for earlier cables, with "marline ties."  The use of marline ties for attaching aerial cables to suspension wires was discarded in 1933 and metal cable
rings were adopted as standard.

At 82 million, this year saw the all time highest number of Telegrams sent.


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

Private Automatic Branch Exchanges (PABXs) were introduced.

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

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

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


The first Rural Automatic Exchange (RAX) in this country was brought into service on 24th October at Ramsey, Huntingdonshire, in the Peterborough Telephone Area. It was a 40-line exchange, supplied by Siemens.
This was the first in a series of trials of exchange equipment intended to improve the telephone service to rural subscribers. Rural areas were until now served by small manual exchanges attended by caretaker operators. Exchanges with fewer than 20 subscribers did not normally give service at night or on Sundays, an obvious inconvenience. The Post Office eventually standardised on a GEC designed 100-line automatic exchange for rural areas known as RAX No. 5 in 1929.
A larger GEC design with 200 lines known as RAX No. 6 was introduced in 1931 and yet larger units with more facilities were adopted in 1937. These larger exchanges were suitable for both rural and urban areas and had facilities for dialling into, and receiving calls from main exchanges. Because the unit concept of construction was adopted, which allowed the exchange to be enlarged by the addition of further cabinets of equipment, they were known as UAX (Unit Automatic Exchange) Nos. 12, 13 and 14. The Post Office was now able to give rural communities a telephone service as good as that provided to urban subscribers.

Kiosk No. 1 was introduced, the first standard Post Office design and primarily intended for use as an open-air public call office in rural areas, later superseded by the No. 3. It was similar in design to the old wooden-box call offices, but was made up from three sections of reinforced concrete and fitted with a wooden door with the two sides and front containing glass panels. Once the kiosk had been constructed it could then be painted any colour to meet local conditions. The most distinctive feature of this kiosk was the spear-like finial on the roof, and roof signs were added on certain obscure kiosks. An initial contract had been placed with Somerville & Company in March 1920 for the supply of 50 kiosks at a price of £35 each - this was reduced to £15 in following years because of demand. Although the kiosk was quite successful, it was considered that a better design could be found. Eventually by 1931 the installation of the No. 1 in rural areas was discontinued.

Toll Exchange - The London Toll Area boundary was extended in 1923 and again in 1928, so that eventually Southampton, Portsmouth, Reading, Bedford, Colchester and the whole of Kent and Sussex were included. The system was later introduced to other large cities and remained in use until the late 1950s when, with the advent of STD, Toll was eventually phased out.

The Post Office Advisory Council was set up this year to advise the Postmaster-General and keep the Post Office in touch with the views of the business community and other users of its many services. Its membership consisted of representatives of a variety of interests in careful balance - political, national, social and functional.

The Research Section of the Post Office Engineering Department was moved from the City to a number of army huts at Dollis Hill. The Dollis Hill Research Station was later built on the same site in 1933.

Concrete telephone kiosks introduced.


The first 'relay' automatic exchange for the public telephone service in this country was provided for the Post Office at Fleetwood, Lancashire by the Relay Automatic Company (originally set up as the Betulander Automatic Telephone Company by Marconi's Wireless Telegraph Co Ltd in 1913). It was opened for service on 15 July.
The relay system was developed from that devised by Gotthief Angarius Betulander, an engineer in the Swedish Post Office and, as the name 'relay' suggests, was dependent on electro magnetic relays for performing the switching function. There was thus no frictional wear and the system was an entirely different concept from electro-mechanical type such as Strowger which involved the moving of a brush on a wiper over a number of contacts. In principle, the relay system, with its use of markers and relay crosspoint matrix and link trunking, foreshadowed the later crossbar and reed-electronic exchanges (although the crossbar switch itself had already been invented).

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

It had been thought that there might be difficulties using the Strowger system in very large cities such as London where numbers of large exchanges, and consequently a great number of inter-exchange calls, created a highly complex interconnected network. A number of solutions were put forward, but the problem was solved when the Automatic Telephone Manufacturing Co Ltd of Liverpool, working in conjunction with the Post Office, developed the 'Director'. This was a Strowger system with a number storage and translation facility which could 'direct' telephone calls through the complex network of circuits linking exchanges in large cities. This was achieved by the translation of the digits dialled by a calling subscriber to other numbers in order to direct the call over the most convenient route to the required exchange. The Director system also included the facility for calls to be dialled from automatic to manual exchanges where the required numbers appeared visually before the operator handling the incoming call, who then completed the connection manually. This Coded-Call Indicator (CCI) facility meant that a subscriber connected to a London automatic exchange dialling the number of a subscriber on a London manual exchange would be unaware that the call was not completed automatically. In addition, there would be no change of procedure for the subscriber once the manual exchange had been converted to automatic working. This was an important advantage, as the transition from manual to complete automatic working would not be concluded for very many years.
One feature of the decision to adopt the Strowger system was the many thorough economic planning studies made by the Post Office to determine the conditions justifying the adoption of automatic working. These studies demonstrated the need to be able to extend an exchange over a ten-year period and hence the requirements for uniformity of design, constructional and circuit practices. Another essential feature was pooling of patents amongst the British manufacturers of automatic exchange equipment to standardise all Strowger equipment construction. This co-operation between the Post Office and the manufacturers led to the first Bulk Supply Agreement the following year.

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

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

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

First Teleprinter trials.

I was decided that all future automatic exchanges should be designed to operate with subscribers' dials having a 66 per cent break period on each pulse.  This standard was in place until the introduction of IP exchanges in the UK, with most providers opting to discontinue pulse dialling.


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

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

  • Loading Coils, 1931-1963
  • Cable, 1931-1963
  • Batteries, 1931-1953
  • Telephone Subscribers Apparatus, 1933-1968
  • Transmission (Audio and Voice Frequency Telegraph)
  • Equipment, 1936-1946
  • Cordage and Cords, 1936-1952

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

Communication across the Atlantic by wireless telegraphy

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

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

London Toll system extended to Brighton and Aylesbury.

Largest (at the time) PABX installed by ATM at the County Hall of the London County Council at Westminster. Installed capacity was 650 extensions.  Click here for more information


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

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

Another interesting adaptation of the Strowger step-by step system was demonstrated by the opening of the Dundee and Broughty Ferry automatic exchanges in March 1924.  The opening of these exchanges also marked the entry of the General Electric Company into the automatic switching field. The Dundee equipment used mechanisms purchased from the North Electric Company of the U.S.A., but the associated relays, racks, manual switchboards, etc., were designed and manufactured in this country. A feature of the North Electric system was the arrangement of the selector banks so that the face of the bank contacts lay in a vertical plane. The
group and final selectors stepped first in a rotary direction, and then vertically upwards into the "level" selected. The subscribers' lines were terminated on 25-point preselectors arranged for self-interrupted drive via a ratchet-and-pawl system.

In 1924 the Telephone No. 150 was introduced. Similar to earlier telephones in that it was a candlestick model, it was innovatory in introducing the dial to most subscribers for the first time. Reflecting the progress of automatic switching, the dial operated the automatic exchange switching mechanism by sending out a series of electrical impulses corresponding to the number being dialled. It was no longer necessary for the operator to connect all calls. Where a No. 150 was still connected to a manual exchange, the space in the base of the telephone for the dial was covered by a dummy insert (used as a number label holder) which could be replaced by a dial when the exchange went automatic.

A competition to design a new kiosk was organised and several leading architects were invited to submit designs. Models were placed on view behind the National Gallery and selection was made by the Fine Arts Commission. The winner was a design by Sir Giles Gilbert Scott and, after a slight modification to the door and change of material from mild steel to cast iron, it was adopted by the Post Office and designated Kiosk No. 2, or K2.
Some important improvements to the door mechanism and window arrangement were contained in the kiosk. The glass was deliberately made into small panels so that breakages could be repaired with a minimum of renewal. There was also a ventilation system which worked through perforations in the dome. Because of its cast iron construction it weighed approximately 1.5 tons and had more interior space than its predecessor. The most distinctive feature was undoubtedly the bright red colour scheme. The kiosk's introduction in 1927 was mainly confined to London and some large provincial towns and proved to be very successful. It was eventually made obsolete in June 1936 , although a number continue to be found in London today and very few in other large cities. A number have been designated as Grade II listed buildings and will continue to be preserved.
Gilbert Scott's original model of what was to become the K2 still stands outside the National Gallery, at first glance identical to its progeny although it is in fact different in some details, principally in its wooden construction.


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

  • the average subscriber's calling rate should not be less than five calls per day
  • not less than 4,000 calls per day should need to be switched automatically
  • not more than 40 per cent of the originating calls must involve manual handling.

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

A new type of coin-box was introduced, the well-known Button A and Button B prepayment equipment, and for over 25 years its design remained unchanged despite various developments in the design of kiosks. It was usually installed in both automatic and central battery manual exchange areas. To make a call in automatic areas, users inserted the appropriate fee which prepared the circuit for dialling. In manual areas, callers were connected to the operator on insertion of the call fee and, in both cases, the caller then depressed Button A. This allowed the coins to be deposited into the cash box and the call to be transmitted. If a call could not be connected for some reason, or if there was no reply, Button B was depressed, the line was disconnected for five to seven seconds and all the coins were returned to the caller.
Although 6d (2½p) and 1/- (5p) slots were available for other calls, the minimum fee necessary to make a local call at the time was 2d. The mechanism was originally designed to check the presence of two pennies by a weighing operation. It was set to a minimum and maximum acceptable weight for the coins as a safety margin, but as the fee was gradually increased to 3d and then 4d the safety margin became smaller and eventually unacceptable. A mechanical counter was considered too expensive as the modifications needed would have been too many and too complex. To overcome this problem a new mechanism was devised by Hall Telephone Accessories Ltd and was in effect a combination of the two basic methods: three pennies were checked by weight and the mechanism waited for the insertion of the fourth penny before allowing the call. The system required the smallest amount of additional equipment and could be easily fitted. A limitation was that it could not be easily adapted for an increase beyond 4d.
In 1959 the first versions of the new Pay-on-Answer payphones were being introduced and at the end of the 1950s began to supersede the 'Button A and B' models. This was made necessary following the introduction of Subscriber Trunk Dialling (STD) in major towns which allowed no reasonable modification to enable the 'A and B' box to be used to pay for automatically connected trunk calls. However, some 'A and Bs' remained in active use in Scotland until 1992. The primary reason for their retention lay in their remote locations. Because the boxes functioned on a single-channel radio link there was no reasonable solution for many years that would allow the use of Subscriber Private Metering (the principle on which the latest pre-payment payphones operated).

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

Large multichange exchange areas

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

Pre-payment Coin Collecting boxes introduced.


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

In 7th January 1927 a regular telephone service began between Britain and the USA.

The first Director exchange was used in Holborn,  London.


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

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

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

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

Rugby Long Wave telegraph transmitter, with world wide range, brought into service.


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

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

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

Cast iron kiosks were introduced (Kiosk No. 2) in 1927, designed by Sir Giles Gilbert Scott. The installation of this kiosk was confined to London (where many can be seen today) and some large provincial towns following a competition held in 1924.

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

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

An international time signal was broadcast throughout the world from Rugby Radio Station. A joint development with the Admiralty and Board of Trade, it was intended to assist mariners. The time signals were generated from the Royal Greenwich Observatory.
In 1949 quartz clocks provided by the Post Office replaced the mechanical pendulum clocks in the Greenwich Time Signal (GTS) generating apparatus at the Royal Observatory. These clocks continued in use until 1967, when caesium atomic standards were introduced.
Rugby still transmits the Greenwich Time Signal, which is derived from the National Physical Laboratory's atomic resonance standard. The laboratory is now the UK's national centre for time - its atomic clocks generate the UK's time standard, which is made available via transmissions from Rugby Radio Station. The BBC's "pips" are derived in part from the same signal (the BBC has been responsible for generating the 'pips' since 5 February 1990 when it assumed the role from the Royal Greenwich Observatory).

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

K2 Cast Iron telephone kiosks introduced.


The first shortwave (high-frequency) radio telephone link between Britain and the USA through Rugby Radio Station was opened in June. Test transmissions began earlier in the year with a transmitter located at Handley Cross Farm, Rugby.

All Post Office extra-European telegraph services (including "Beam" wireless and the Imperial Atlantic Cable) transferred to Cable and Wireless LTD.

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

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

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

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

New York telephone basic rate reduced to £9 for 3 minutes conversation.

London Toll Area extended to include Southampton, Portsmouth, the whole of Kent and Sussex, Reading, Bedford, Ipswich and Colchester.

As of March 31st the UK had:-

Telephones Stations 1,643,648
Telephone Kiosks 23,998
Telephone Exchanges - Manual 4,206
Telephone Exchanges - Automatic 111
Telephone Calls - Inland 1,070,500,000
Telephone Calls - Trunks 102,206,596
Telephone Calls - Overseas 702,000


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

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

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

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

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

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

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

Telephone service opened to Finland and Portugal.

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

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

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

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

The BBC extended its services to include broadcasts of television.

The Post Office adopts the Teleprinter as the standard instrument for inland telegraph circuits.


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

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

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

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

A motor cycle telegraph messages service was inaugurated at Bournemouth.

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

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

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

Four-frequency keysending at "A" positions in London.


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

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

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

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

A telephone cable was laid to the Channel Islands.

Telephone service was established with New Zealand.

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

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

"Gamewell" street fire alarms introduced.


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

The Bridgeman Committee was set up in 1932 under the chairmanship of Lord Bridgeman to investigate criticisms that the Post Office, as a large-scale commercial undertaking, should be run along the lines of a business concern rather than as an ordinary government department. This criticism had culminated in a submission to the Prime Minister of a memorial signed by 320 Members of Parliament asking for an enquiry into the status and organisation of the Post Office with a view to effecting any necessary changes in its constitution.

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

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

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

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

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

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

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

Standing Postal Estimate Committee (SPEC)

Standing Telecommunications Advisory Committee (STAC)

Standing Factories Advisory Committee (SFAC)

Clerical Estimates Committee (CEC)

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

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

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

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

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

The Post Office introduced telephones with anti-sidetone induction coil. The anti-sidetone telephone circuit had been invented in 1920. See Telephone No. 232.

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

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

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

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

Ring-type pole-heads were introduced as a more elegant means of mounting spindles and insulators for the radial distribution of wires from distribution poles in residential districts. At the same time, the covered drop-wire system was introduced as an alternative to open-wire distribution. This system makes use of a flat twin cable consisting of cadmium-copper conductors. rubber insulation and an
overall textile braiding treated with a water-proofing compound. The drop wire is attached to poles and buildings by means of simple clamps, and can be run without a break direct from the terminal block on the distribution pole to the subscriber's protector, with a
consequent saving of installation time.

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

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

Telex, Printergram and private telegraph services introduced, using Teleprinter No. 7B.

The last inland Morse circuit in the C.T.O. was closed.

Teleprinter No. 7 introduced.


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

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

Phonogram work was transferred from telephone to telegraph staff.

'Demand' trunk service was extended to group centres.

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

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

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

First 9 channel (bothway) VF telegraph system (using 4 wires) bought into service.


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

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

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

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

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

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

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

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

First 800 line Unit Automatic Exchange (UAX No. 7) opened.

Business small tariff introduced.

Cheap (1/- max) night rate introduced.


Telephone service opened with Japan.

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

The first standardised U.A.X. 12 (100-line unit) was introduced and superseded the U.A.X. 5.  This exchange provided direct routing with multi-metering from the U.A.X. to exchanges other than the parent exchange.

1+2 carrier transmission was introduced.

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

First telegraph 4 channel bothway VF system using 2 wire telephone circuit.

Teleprinter ancillary working introduced.

Jubilee Telephone Kiosk concessions:-
a. Jubilee - provision in every village with a Post Office.
b. Tercentenary - provision in villages without a Post Office, under certain circumstances.


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

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

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

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

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

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

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

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

In 1999, BT operated a network of over140,000 public payphones of various designs across the UK, compared to 81,000 ten years previously, with an average of 5,000 new units being installed each year.

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

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

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

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

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

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

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

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

The PO 2000 type selector is introduced at Rugby.  This became the standard selector type for many years.

Trials were held of two-frequency (2 VF) trunk telephone signalling and dialling.

Anglo-Continental telex service introduced.

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

Telephone No. 332 was introduced by the Post Office in 1936, an improved design on the revolutionary No. 162 (introduced in 1929) as it was less liable to breakage and provided extra facilities controlled by press buttons.  The telephone also had an integral bell, which was always external on the 1929 model.


The 999 emergency telephone service was made available to London subscribers from 30th June and was later extended throughout the country. When 999 was dialled a buzzer sounded in the exchange and a red light flashed to draw an operator's immediate attention.
This was very far removed from the sophisticated information service designed by BT and launched on 6th October 1998. The new information service allowed details of both the calling number and the address from which a 999 call had been made to be transferred automatically to the emergency authority operator's screen.

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

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

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

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

The London Trunk Director Exchange was opened.

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


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

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

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

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

As of March 31st the UK had:-

Telephones Stations 3,050,012
Telephone Kiosks 48,168
Telephone Exchanges - Manual 3,104
Telephone Exchanges - Automatic 2,559
Telephone Calls - Inland 2,059,300,000
Telephone Calls - Trunks 105,838,286
Telephone Calls - Overseas 1,887,000


Headquarters exchange, which is the new name for the official Post Office P.A.B.X., was opened on Saturday, April 29th, 1939, replacing the old Official Switch P.A.B.X., NATional 6321. The original system was of the Keith line switch Strowger type.

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

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

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

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

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

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

'Two frequency' (2 VF) inland trunk signalling and dialling was introduced. This beginning of trunk mechanisation allowed operators to dial distant subscribers without the assistance of a second operator.

The first mobile Unit Automatic Exchange was put into service.

Defence teleprinter network opened.

Teleprinter working introduced on Anglo-continental telegraph cables.

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


The Private Manual Branch Exchange Switchboard (PMBX) No. 1A was introduced.

The London-Birmingham coaxial cable was extended to Manchester.

On 1st July 1940 telephone service to Guernsey and Jersey was suspended and all but two of the engineering staff had been brought back to England.

On 2nd July 1940 a rescue attempt for the two remaining staff at Mr L Huray (Guernsey) and Mr Warder (Jersey).  The Bailiffs refused to let these two staff members to leave and due to the closeness of the German military the the rescue crew returned to the mainland.  The two staff members remained on the islands for the duration of the war.

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


The telephone 12-channel carrier system was standardised.

The Liverpool Director Area was inaugurated with the opening of Advance Exchange.


Shared service was introduced on automatic exchanges.

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

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


Subscriber dialling in London Director Area was extended.

The first submerged repeater was laid in the Irish Sea between Anglesey and the Isle of Man in a submarine coaxial cable using a rigid housing (suitable to 200 fathoms).

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

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

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

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

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

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

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


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


The inland teleprinter manual switching was introduced.


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

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

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

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

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

Post war re-opening of some trans-Atlantic services.  A call from London to New York at basic rate is 3 for 3 minutes.


Continental and overseas telephone services continued to be gradually reopened.

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

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

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

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

Direct telephone service opened to Ceylon.


An Anglo-Dutch polythene coaxial cable was laid.

Cable & Wireless Ltd. was nationalised on 1st January 1947 by the Treasury's purchase of the company's shares, and by the Post Office's acquisition of the company's telecommunications assets in Britain (with the exception of its telegraph cables and terminal station at Porthcurno), including the return of the wireless stations previously leased to the company in 1929.

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

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

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

During 1947 the Post Office sold scrap stores to the value of £1,128,000. This saving to the public resulted from careful salvage of every type of material no longer fit for service. Condemned telephone and telegraph cables, wires and instruments were broken down and the component metals separated for bulk disposal. More than 9,000 tons of scrap lead and 1,700 tons of scrap copper were recovered and sold. Discarded uniform clothing, boots and shoes and rags realised £16,900; waste paper fetched £29,600, and miscellaneous scrap brought in £120,000.

By this year some 210,000 of the outstanding applications for telephone service could not be satisfied due to the shortage of exchange equipment.


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

Whole of pre-war telephone services reinstated except those to Guatemala, Malaya, Philippines, Siam and Syria.

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

Telephone service was opened with China.

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

Anglo-Belgian submarine co-axial cable laid.

As of March 31st the UK had:-

Telephones Stations 4,652,704
Telephone Kiosks 52,098
Telephone Exchanges - Manual 2,197
Telephone Exchanges - Automatic 3,840
Telephone Calls - Inland 2,681,000,000
Telephone Calls - Trunks 216,614,671
Telephone Calls - Overseas 1,702,600


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

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

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

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

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

Demand trunk service to Paris introduced.

Telex service re-opened with Western Zone of Germany.


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

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

In 1950 the control of the overseas services of Cable & Wireless Ltd from the United Kingdom was transferred to the Post Office. At the same time, the radio beam stations leased to Cable & Wireless were returned to the Post Office.

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

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

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

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

An Anglo-Danish submarine coaxial cable was laid.

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

First phase of the Post Office Teleprinter automatic switching scheme introduced.


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

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

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

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

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

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

Demand trunk service to Antwerp introduced.

Telex service re-opened with Luxemburg, Finland and Austria.

In this year a 12 word Telegram would cost 7.5p


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

New Telex network opened for Government departments only.

As of March 31st the UK had:-

Telephones Stations 5,716,200
Call Offices 60,400
Telephone Exchanges - Manual 1,584
Telephone Exchanges - Automatic 4,297
Telephone Calls - Local 3,320 million
Telephone Calls - Inland Trunks 261 million


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

Pressurisation of trunk and junction cables was introduced.

Telephone service opened with Eastern Zone of Germany.


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

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

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

New Telex service introduced.

Telex service opened with Portugal, Spain and Eastern Zone of Germany.

In this year a 12 word Telegram would cost 15p.


The first cordless switchboard was opened at Thanet Exchange.

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

Unified Operating Procedure for trunk and toll calls introduced.

Ilfracombe Radio opens.


The first transatlantic telephone cable (TAT1) was laid between Oban in Scotland and Clarenville in Newfoundland, a distance of 2,240 miles. After crossing Newfoundland, a further submarine cable was used to complete the connection to the mainland of North America, some of the circuits terminating in Canada and some in the USA. The Post Office cableship HMTS 'Monarch' (No. 4) participated in the lay. The cable entered service on 25th September at 6pm. It was withdrawn in 1978.

The Weather Forecast Service and the Test Match Information Services were introduced in the London area and later extended to other parts of the country.

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

Telex service re-opened with Italy and Canada.


The Road Weather Information Service was introduced.

The success of the Weather and Cricket services was followed by a request from the Automobile Association for the provision of a "state of the road" service at a number of towns, the object of the service being to provide the caller with information regarding the condition of the roads within a 50-mile radius of the centre. After detailed investigation of a number of centres it was agreed initially to provide this service in London, Birmingham, Cardiff, Edinburgh, Glasgow, Liver pool, and Manchester for the winter months commencing 1st November, 1957.  Information for this service is given to the local recording centre by the local A.A. Area Head
quarters who have prepared the message from reports sent in by A.A. mobile patrols in the area.

The free call allowance for residential subscribers was abolished.


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

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

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

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

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

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

Answering Machine No. 2, followed in 1963.

First automatic Telex exchanges opened at Leeds and London.

The ICT 1201 computer was introduced.  This was punch card controlled and used electronic valve logic.

As well as the above two Elliot (ICL) 405 computers were also introduced.  These used magnetic film storage.


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

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

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

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

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

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

The first versions of Pay-On-Answer coinboxes on public payphones were introduced and began to supersede the Button A and B models (Bristol had the first one). They were necessary following the introduction of STD in major towns because the A and B boxes could not be modified to cope with automatically connected trunk calls. Public demand had been for a coinbox slot that would accept the 3d piece, but after only seven years the box was modified to accept 6d (2½p) and 1s (5p) coins only. The introduction of decimal coinage in 1971 made another modification necessary. Thereafter, there was only one further modification before Pay-On-Answer payphones were phased out. Plans were made in 1978 to update the entire payphone system by exploiting the advantages of electronic technology. It was decided that the new system would be based on the pre-payment approach with a refund of unused coins where appropriate. Modernisation began in 1985 when BT embarked on a £160 million programme to replace red phoneboxes and Pay-On-Answer mechanisms with the newly introduced blue payphone in new housings, the KX 100 and 400 family of anodised aluminium and stainless steel booths.

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

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

The second transatlantic telephone cable (TAT 2) was laid by the Post Office cableship HMTS Monarch (No. 4) between Penmarch, France and Sydney Mines, Nova Scotia, Canada via Terrenceville, Newfoundland, Canada.  TAT 2 was taken out of service in 1982 after 23 years of service.

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

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

Telephone service opened to the whole of Russia.


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

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

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

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

The first London STD exchange (Watford) was opened.

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

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

Telephone No. 706 was introduced.

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

Telex service opened with Nigeria, Pakistan, India, Kenya and New Zealand.


The Anglo-Canadian cable (CANTAT 1) was laid by the Post Office cableship HMTS 'Monarch' (No. 4) between White Bay, Newfoundland, Canada and Oban, Scotland, as the first section of the submarine telephone cable network linking the Commonwealth. This was the first time that the lightweight submarine cable, developed by the Post Office in 1951, was used in service. CANTAT 1 was taken out of service in 1982 after 23 years of service.

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

A recipe telephone information service was opened in Birmingham.

A radio telephone service from aircraft was introduced.

An Elliott 803 computer is introduced in the Research and Development Department.


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

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

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

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

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

Post Office Act passed, giving the Post Office greater measure of financial independence.

International subscriber dialling of Telex calls introduced.



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

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

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

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

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

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

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

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

In this year and until 1970 a 12 word Telegram would cost 25p.


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

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

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

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

The Post Office was a founder member of INTELSAT; the International Telecommunications Satellite Organisation founded to develop a global commercial satellite communications system.
Originally having a membership of eleven, there were over 100 member countries in 1999, the UK being the second largest shareholder. BT was the UK representative on INTELSAT. On the technical side, BT contributed substantially to studies on the characteristics and utilisation of successive generations of INTELSAT satellites.

Two English Electric LEO III computers were introduced but these were converted into LEO 326's in 1965.

An Elliott 803 computer is used at Goonhilly for aerial guidance.


INTELSAT 1 (Early Bird) the first commercial communications satellite, was launched into a synchronous orbit of 22,300 miles on 6 April. Goonhilly goes live as Aerial No. 1 becomes operational.

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

The Tower - the focal point for this network - and the four-storey building below are equipped to handle 150,000 simultaneous telephone connections and to provide 40 channels for black and white or colour television. It was partly to meet the growing demands of broadcasting that the Tower was opened, enabling the use of microwaves instead of landlines.
Postmaster-General Anthony Wedgwood Benn, opened the Tower to the public on 19th May the following year, accompanied by Sir Billy Butlin who had taken the lease on the revolving restaurant on the 34th floor.

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

The Tower Suite conference area, 158 metres (520 feet) above ground, revolves two and a half times each hour. Nylon tyred wheels running on inner and outer circular rails support the rotating structure which weighs 30 tons.
During the first year the Tower was open to the public, from 19th May 1966 to 19th May 1967, it was visited by nearly 1 million visitors, 105,000 of whom dined in the revolving restaurant. They were transported by the Tower's two lifts, which are among the fastest in Europe, travelling at 6 metres per second. During that first year the lifts between them travelled nearly 70,000 kilometres. The fare for everyone, whether dining or not, was 4 shillings (20p) and half price for children.

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

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

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

Datel services were extended.

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

The first Internet was begun by Bolt, Beranek & Newman (BBN). Called the ARPANET, it was a network connecting the University of California at Los Angeles (UCLA), SRI in Stanford, USA, University of California at Santa Barbara and the University of Utah, using 50Kbps circuits. It was completed to its original specification in 1969.
In 1984 ARPANET was divided into two networks, one to serve the military (MILNET) and the other to support academic research (ARPANET). The US Department of Defence continued to support both networks.
In 1992 the Internet Society was chartered, triggering the World Wide Web phenomenon.

Additional ICL LEO 326 computers are installed for use on Telephone Billing and payroll.  9 in total were purchased.

Two more computers are introduced in the Research and Development Department.  These are Elliott 503 models.

Introduction of the Telephone No. 712 - Trimphone.  This was a lightweight telephone with an illuminated dial and it attracted a premium on the rental.


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

Telephone No. 712 - later No. 722 - (the 'Trimphone') was made generally available.  This innovative design by STC, half the weight of the more traditional 700-type telephone, originated in 1961 when the Post Office decided it needed a luxury telephone to add to its range. Towards the end of 1963 the Post Office settled on the design by STC, and in 1964 placed a contract for 10,000 units. The first example of the Trimphone was presented in May 1965 by the Postmaster-General, Anthony Wedgwood Benn, to a newly wed couple in Hampstead in a ceremony marking the installation of the ten millionth telephone to be installed in Britain. The new design was trialled in the London North West Telephone Area in the same year, before becoming available throughout the country in 1966 in three two tone colour combinations. By 1980 there were 1.6 million in operation out of a total telephone population at that time of 27 million.

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

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

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

The TXE2 was a result of research into space division electronic exchanges and its introduction was part of the major programme of investment into the network by the Post Office using modern switching equipment which began around this time. Initially, the TXE2 was used for exchanges with a capacity of up to around 2,000 lines. The Plessey 5005 (TXK1) crossbar exchange, also produced under agreement by GEC, was used for larger installations in non-director areas and group switching centre exchanges. The BXB (TXK3) crossbar exchange, a derivative of the ITT Pentaconta crossbar system developed in France, was made by STC for larger installations in director area and trunk-transit exchanges.
The TXE4 electronic exchange, a development complementing the TXE2, was introduced from 1976 to take over from crossbar the provision of large exchanges.

During the 1980s and 1990s the TXE and TXK families of electronic and electromechanical exchanges were gradually replaced with System X and System Y digital exchanges in a £20 billion investment programme. The last TXE2 exchanges (Ballycastle, Northern Ireland, Llandovery, Wales and Ramsbury, England) were closed on 23rd June 1995. The last TXK crossbar exchange, at Droitwich, was withdrawn in 1994.
The UK network became totally digital on 11th March 1998 with the closure of the last electronic TXE4 exchanges at Leigh-on-Sea and Selby and their conversion to System Y (AXE 10) and System X respectively.

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

Change to all-figure telephone numbers commenced in Director areas.

Datel 600 introduced.


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

Inauguration of the Birmingham Radio Tower.

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

A prototype Confravision studio was opened in London.

Datel 200 service introduced.


The Post Office installed the world's first PCM (Pulse Code Modulation) exchange at the Empress telephone exchange near Earl's Court in London. Postmaster-General John Stonehouse opened the exchange on 11th September with an inaugural call to the Mayor of Hammersmith.
The possibilities of PCM systems for the transmission of speech had been originally developed more than 30 years earlier in 1937 by A. H. Reeves working in Paris for the Western Electric Company, and PCM was first patented by him in France the following year. He proposed a transmission system in which voice signals were electronically coded into strings of digital pulses, transmitted in this form, and then turned back into speech at the receiving end. His ideas were well in advance of his time, but the technique could not be economically realised until suitable components, particularly transistors, were available.
Technical advances in the early 1960s enabled the possibility for the first time of PCM providing an economic solution to the problem of providing multi-channel systems designed for speech networks. Conventional analogue transmission allowed two pairs of wires to carry two conversations at one time. PCM transmission increased this to 24 simultaneous conversations by interleaving the groups of pulses corresponding to different callers (Time Division Multiplexing), reducing the need for many new cables. PCM transmission also allowed a greater diversity of telecommunications services in addition to telephony, including facsimile and data transmission.

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

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

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


The General Post Office ceased to be a Government Department on 1st October 1969 and was established as a public corporation under the Post Office Act of this year.
The idea of converting the Post Office into a nationalised industry had first been raised as early as 1932 when a publication by Lord Wolmer entitled 'Post Office Reform' made references to the subject. There was at the time widespread criticism of the existing organisation of the Post Office and one proposed improvement was that the Post Office, as a large commercial undertaking, should be run along the lines of a business concern rather than an ordinary government department. A committee under the chairmanship of Lord Bridgeman was set up, also in 1932, to investigate these criticisms.
In the event it was not until 1965, following a Labour victory in the parliamentary election of the previous year, that Postmaster-General Anthony Wedgewood-Benn put into motion the process that finally culminated in the creation of the Post Office as a public corporation. After much study and deliberation the Post Office Act, 1969, was passed and this laid down the structure of the new organisation, the Corporation being split into two divisions - Posts and Telecommunications - which thus became distinct businesses for the first time. Under the Act, the Post Office had the exclusive privilege of running telecommunications systems with limited powers to authorise others to run such systems.

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

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

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

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

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

Aerial 2 opens at Goonhilly.

Midnight line service made available.

Thirteen ICL System 4 computers are introduced for use on Billing, Payroll and Statistics.

Wallington, the last London Manual Telephone exchange is replaced by a combined Wallington (01-647) and Franklin (01-669) automatic exchange.  Wallington manual was opened in March 1927, the same year London received it's first automatic exchange at Holborn.


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

The International Subscriber Trunk Dialling service was extended to allow London subscribers to dial New York numbers - the world's first major Inter-Continental subscriber dialling service. The cost was 10s (50p) per minute.

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

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

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

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

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

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

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

A Business News Summary telephone information service was introduced.

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


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

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

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

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

The first TXE2 exchange, in the London Telephone Region, was opened at Nutfield Ridge, Surrey.

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

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

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

The Dataplex 1 service (FDM) was introduced.

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

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

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

Automatic Telex service extended to Hong Kong and USSR.

Telex service opened to South Vietnam.

First direct dialled trunk telephone link established between London and the Irish Republic (centred on Dublin).

Telephone service to the Peoples Republic of China resumed on a part time basis after a lapse of 22 years.

Telephone service opened to Greenland, Korea and Yemen Arab Republic.

An improved version of the Trimphone was released and this was coded the Telephone No. 722.


Aerial No. 3 was completed at the Post Office Satellite Communications Station at Goonhilly Downs, making the station the largest in Europe and the first in the world to operate simultaneous commercial services through three satellites.

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

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

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

Telex service opened to Cook Islands, Laos and Somalia.

Channel Islands telephone service became independent.

Datel2400 Dail-up service introduced using public telephone network.


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

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

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

The first mobile electronic exchange was brought into service.

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

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

Datel400 service introduced using public or private telephone circuits, digital or analogue transmission.

Dataplex 2 service (TDM) introduced.

Telex service extended to China and Mongolia.


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

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

A new transatlantic telephone cable (CANTAT 2) was completed between Widemouth, Britain and Halifax, Novia Scotia, Canada (capable of carrying 1800 calls at once).

Full 24 hour telephone service opened to China via Satellite (Intelsat 4).

IXSD to Jamaica.  Fully automatic service introduced on 5th October.

Brent Radio closes.

In late October the last 2 magneto exchanges in service in the UK, on the islands of Jura and Colonsay, were converted to SAX's.

During November the last UAX5 in the UK, on the Isle of Coll was converted into an SAX.


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

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

20 Millionth telephone installed by January.

Two GEC 4080 computers are introduced for the Viewdata System trial.


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

Britain's first commercially produced electronic telephone exchange, the TXE4, was opened at the Rectory Exchange at Sutton Coldfield near Birmingham.  They were manufactured for public service in exchanges handling 3,000 to 40,000 lines to gradually replace the existing Strowger and crossbar electromechanical exchanges.
During the 1980s and 1990s the TXE and TXK families of electronic and electromechanical exchanges were gradually replaced with System X and System Y digital exchanges in a £20 billion investment programme.  The last TXE2 exchanges (Ballycastle, Northern Ireland, Llandovery, Wales and Ramsbury, England) were closed on 23rd June 1995.  The last TXK crossbar exchange, at Droitwich, was withdrawn in 1994.
The UK network became totally digital on the 11th March 1998 with the closure of the last electronic TXE4 exchanges at Leigh-on-Sea and Selby and their conversion to System Y (AXE 10) and System X respectively.

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

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

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

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

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

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


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

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

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

The "Compact Telephone" (Telephone No. 776) was introduced.  It was available in a limited edition in the colour Balmoral Blue, to mark the occasion of the Queens silver jubilee.


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

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

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

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

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

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


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

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

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

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

An evaluation model UXD 5 digital telephone exchange was opened for trial in Glenkindie, Aberdeenshire, making Glenkindie subscribers the first to be connected directly to a digital exchange. This was the first digital public exchange introduced into the UK network.
The introduction of UXD 5's into the network brought rural customers digital Network Services ahead of their counterparts living in more rural areas.
The UXD 5 rollout enabled the business to establish remote working practices in advance of NOU's, thus reducing the overall cost of ownership while providing customers with an improved quality of service.
UXD 5 was enhanced over the years, so that by 1998 it was able to carry an acceptable range of digital facilities, such as Call Waiting, 3 Way Calling; Call Diversion, Call Barring and fully itemised billing. During 1998 further digital services were added, including Calling Line Identity, Caller Return (1471) and single stage indirect access. ISDN 2e was also rolled out to UXD 5 exchanges during 1998.

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

The Post Office launched a facsimile service, Fonofax.

A new international organisation, INMARSAT, was created this year to be responsible for the formation of a global maritime communications system. BT remained a major participant, and an aerial operating to the INMARSAT system came into service at Goonhilly during 1983. Originally set up to provide marine communications, it subsequently expanded into the delivery of data to mobile phones and laptop computers.
In April 1999, by this time an 86-strong co-operative, INMARSAT became a privatised company. Henceforward, the organisation would be run by a 14-member board of directors, on which BT would be represented as the second largest investor. This was the first time that a privatisation involving an inter-governmental organisation had taken place. At the time of its privatisation, INMARSAT, short for International Marine Satellite, owned nine satellites and had 107,000 international subscribers. It had annual sales of $378 million in 1996, making a profit of more than $60 million, and was growing at more than 30 per cent a year.


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

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

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

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

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

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

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

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

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

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


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

It was also at this time that the first steps were taken to introduce competition into the United Kingdom telecommunications industry. In particular, British Telecom lost its monopoly of the supply of customer premises equipment (CPE) except, as an interim measure, providing the first telephone at an address. In practice, it had become increasingly difficult in the years leading up to the Act to exercise this monopoly as more and more unauthorised equipment was added to the network.
The Act introduced an independent approval regime for CPE. Before 1981, the Post Office and then British Telecom had alone decided what could and could not be connected to its network. The 1981 Act established an independent procedure to set standards and approve equipment for connection to the network. Standards were now set by the British Standards Institution (BSI), while the British Approvals Board for Telecommunications (BABT) issued approvals based on independent evaluations. This was the first step in separating regulatory and operational activities which was essential if private suppliers were to be able to compete with BT on equal terms.

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

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

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

The first 'System X' digital exchange to which subscribers were directly connected was opened at Woodbridge in Suffolk.
The development of 'System X' exchanges was the linchpin of the policy to modernise the existing network by replacing analogue plant with digital switching centres interconnected with digital transmission links. It enabled an increased variety of facilities and services to be made available to the telecommunications user, resulting in ISDN (Integrated Services Digital Network) and ISDN 2 .
Thereafter, the network was rapidly modernised and more and more exchanges converted to digital systems. In 1970, 8.5 million exchange lines were Strowger, representing 98 per cent of the total. As late as 1980, when the number of Strowger lines reached a peak of 13 million, 75 per cent of the network was Strowger. Throughout the 1980s and 1990s modernisation of the network was rapid, so that in July 1990 the long distance or trunk network became totally digital. The last Strowger exchanges (Crawford, Crawfordjohn and Elvanfoot, all in Scotland) were withdrawn on 23 June 1995.

During the same period the TXE and TXK families of electronic and electromechanical exchanges were gradually withdrawn. The last TXE2 exchanges (Ballycastle, Northern Ireland, Llandovery, Wales and Ramsbury, England) were also closed on 23rd June 1995. The last TXK crossbar exchange, at Droitwich, was withdrawn in 1994.  The UK network became totally digital on 11th March 1998 with the closure of the last electronic TXE4 exchanges at Leigh-on-Sea and Selby and their conversion to System Y (AXE 10) and System X respectively.

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

Radiopaging was extended to give a virtually nationwide service.

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

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

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

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

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

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

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


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

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

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

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

British Telecom introduced the Telecom Gold electronic mail service.

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

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

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

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

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

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

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


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

Kenneth Baker, Minister for Information Technology, announced in the House of Commons on 17th November that British Telecom and Mercury Communications would enjoy a 'duopoly' on basic telecommunications services for the following seven years (except for the City of Kingston-upon-Hull which would continue to operate its own service), after which the position would be reviewed. This was to give Mercury security in the early stages of its development to establish itself as an effective competitor to British Telecom, and to give British Telecom time to adjust to competition in the private sector.
Earlier in the year, in February, the Government accepted a recommendation of a report by Professor Littlechild that British Telecom's tariff increases for the five years after liberalisation should be pegged below the inflation rate.

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

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

Mercury launched telecommunications services in the City of London.

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

KiloStream and MegaStream digital private circuit services were launched.

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

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

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

The microprocessor-controlled press-button Blue Payphone 2 was introduced as part of £160 million modernisation programme of the payphone system. The new payphone replaced the pay-on-answer payphones.
The first electronic, microprocessor-controlled payphone, the 'Blue Payphone' had been introduced in 1979.

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

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

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

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

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


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

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

In July 1997 the new Labour Government relinquished its Special Share ("Golden Share"), retained at the time of the flotation, which had effectively given it the power to block a takeover of the company, and to appoint two non-executive directors to the Board.

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

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

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

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

Much larger than the building it replaced, BT Centre now completely covers the route of the old Bath Street, closed in 1934, and the site adjoining the old CTO. The main entrance of BT Centre follows the line of the lost street. Modern in design and appearance.

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

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

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

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

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

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

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

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

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

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

Prestel received the Queen's Award for Technological Achievement.

Prestel Mailbox was introduced nationwide on 15th October.

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

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

Voicebank voice messaging service was inaugurated.

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

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

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

The new speaking clock was inaugurated on 2nd April 1985.

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

Trainphone introduced on BR Western Region.  London - Swansea route.


Cellnet, the British Telecom and Securicor joint venture cellular radio service, was launched on 7th January. It replaced the existing radiophone service operated by British Telecom. Its competitor Racal Vodafone was also launched the same year.

The joint venture company was re-launched as BT Cellnet in 1999. In July 1999 BT announced it would be acquiring Securicor's minority stake in the joint venture.

The first new-style British Telecom shop opened in Southend-on-Sea High Street on 3rd January, selling a wide range of telephones, business equipment and telephone accessories. The new shop was an extension of the existing chain of 53 phoneshops, mostly sited in department stores or in local telephone area offices.

The new speaking clock was inaugurated at 11 o'clock on 2nd April when the voice of Brian Cobby replaced that of Pat Simmons, the voice of the clock for the previous 22 years. The new clock was digital and, with no moving parts, more reliable and accurate than the old equipment.

From 1 November it was possible to rent an exchange line alone from BT without having to pay rental for a telephone instrument.

Modernisation of the trunk network began with the opening of 'System X' exchanges in Birmingham, Coventry, Leeds and the City of London. The initial phase of the modernisation was completed in November 1988 with the opening of the 53rd 'System X' trunk exchange in Norwich. The last analogue trunk exchange at Thurso, Scotland was closed in July 1990 and the BT long-distance network thereby became totally digital, the first major system in the world to do so.

The first Stored Programme Control telex inland exchange was opened.

The first UK operational undersea optical fibre cable was laid, linking the Isle of Wight to the mainland across the Solent.

British Telecom trailed its first Integrated Services Digital Network (ISDN).

Trials of the Linkline 0800 and 0345 services began on 12 November. An International 0800 service was opened from the United States.

Linkline was later marketed as Freefone and Lo-Call.

The Martlesham switched star cable TV and interactive services network was introduced in Westminster.

British Telecom placed an order for around £100 million in March for an AXE 10 (System Y) digital switching system to provide a competitive alternative to System X. The contract was awarded through Thorn Ericsson.

The first AXE 10 exchange was opened the following year at Sevenoaks. As well as being an alternative to System X, introduction of AXE 10 exchanges into the network allowed the modernisation programme of the network to be speeded up. AXE 10 exchanges provided the same range of extra facilities known as Star Services (later known as Select Services) as Systems X, including code calling, repeat last call, three way calling, call diversion, call waiting, call barring, reminder call and charge advice.

A £160 million payphone investment programme was launched. As part of the modernisation the new generation of telephone kiosks began to appear, the KX 100 - 400 series. The first of these new-style booths was unveiled in London's Leicester Square. They were cheaper to maintain, more resistant to vandalism and were designed to blend in with any surroundings. Special attention was paid to environmental considerations, acoustics, weather protection, lighting and ventilation after intensive market research was conducted into customers' needs. Constructed in a variety of designs they were hardwearing and contained paint-free finishes of anodised aluminium and stainless steel. They were also fitted with sound proofing, vandal-resistant panelling and improved lighting. The designs assisted customers with disabilities and allowed access to wheelchair users.

The modernisation programme was completed in 1988. The UK's public payphone system had not been amongst the most efficient in the world, but in the 1988 Quality of Service report it was listed as having a 96 per cent reliability. This success rate continued, compared to only 72 per cent in 1987. As a result of the programme, there were 80,000 of the stainless steel design kiosks in service by 1996, in addition to 30,000 hooded/canopied phones in locations such as railway stations or shopping centres and 15,000 old style red boxes in heritage sites.

BT introduced a new design in 1996, the KX+ range, following widespread research into public opinion, and which built on the successful features of the stainless steel kiosks.

In 1999, BT operated a network of 137,000 public payphones of various designs across the UK, compared to 81,000 ten years previously, with an average of 5,000 new units being installed each year.

Britain's first credit-card-operated public payphone was introduced. Creditcall, like the Phonecard, was another cashless payphone service, enabling customers to make calls using major credit cards. It was installed on a trial basis in London at Heathrow Airport and Waterloo BR station.

BT Japan was set up to represent BT's corporate interests in Japan (BT is listed on the Tokyo Stock Exchange). BT Japan managed BT's relations with Japanese carriers, press and governmental authorities. It was also responsible for new business development activity and for sales of systems and services to the financial community. In 1998 it contributed to the creation of BT Communications Services, the BT / Marubeni joint venture company in Japan.

Teletex, a new automatic high speed message transmission service, was inaugurated on 11th April.

The Singapore office of British Telecom was opened.

British Telecom acquired CTB Inc.

The Message Master radiopager was launched. It was the first pager with a mini screen for written messages.


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

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

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

A trial of an electronic Yellow Pages system was started.

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

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

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

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

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

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

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


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

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

Electronic Yellow Pages was launched on 8th January.

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

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

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

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

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

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

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

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

The 500th System X digital local exchange was opened.

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


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

The General Electric Company and Siemens A.G. announced on 16th November that a jointly owned company, to be named GEC Siemens PLC, is to make an offer for Plessey PLC.

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

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

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

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

A major development programme of Monarch digital telephone systems was launched with GEC-Plessey Telecommunications (GPT).

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The BT Chargecard was introduced.


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

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

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

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

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

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

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

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

The 100 millionth BT Phonecard was produced.

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

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

There was a further code change in 1995.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A third and final flotation followed in 1993.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

The National Weekend Rate, introduced in December, cut the cost of long distance calls by up to 60 per cent so that a three minute direct-dialled call to anywhere in the UK cost just 10p at any time on Saturdays and Sundays.

Different rates applied to national weekend calls using the operator, BT Chargecard or BT payphones.

BT created Syntegra in 1993 as its systems integration business to address the opportunity offered by the convergence of the worlds of IT, telecommunications and consulting. Syntegra helped its customers change the way they ran their businesses, advising on business processes combined with the latest IT and communication systems to give a competitive edge.

Typical customers were multinational corporations, major national organisations and communities of business partners. In 1999, Syntegra employed over 4,000 people, half of whom were based outside the UK doing business in over 50 countries, with customer centres in Europe, the USA, Hong Kong, Singapore and Tokyo, earning revenues of excess of £400 million per annum.

In December 1995 Syntegra acquired the French systems company, Europe Informatique, followed in April 1996 by the acquisition of the Dutch systems integration company, Rijinhaave. These takeovers were part of a programme of an expansion programme of acquisitions and alliances.

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


Peak call rates were abolished on 9th March and replaced by a new Daytime rate, operating Monday to Friday 8am to 6pm. For the first time since 1970, customers were able to make calls in the busy morning period without paying a premium. This was BT's biggest ever single price cut to date, saving customers an overall £350 million over a full year by making direct dialled calls to all UK destinations as cheap in the morning as they were in the afternoon.

BT introduced the Light User Scheme in February for customers who made few or no calls, but who might need a phone as a lifeline. The Scheme offered a rebate based on call bill size of up to more than 60 per cent of the line rental if no calls were made.

The maximum rebate, if no calls were made, was £16.38, reducing the quarterly rental charge to £10.24 - a saving of more than 60 per cent.

By 1998, when BT introduced the "no frills" BT In Contact service, more than three million customers had taken advantage of the Scheme, including many of those for whom the phone was a lifeline.

Directory enquiry charges for UK telephone numbers were reduced from 45p to 25p per enquiry on 1 September (see 1991 and 1998 entries).

The new National Long Distance Call charge band was introduced in September, abolishing the most expensive long distance charge rate and saving customers overall £244 million in a year.

BT launched a joint venture in Spain in April with Banco Santander as an equal partner. The new joint venture company was called BT Telecomunicaciones S.A. and offered managed network services in Spain, such as frame relay, Internet and virtual voice services.

BT took full control of the company by purchasing Banco Santander's 50 per cent shareholding in July 1997, by which time the company had developed a national network with an investment of 17,000 million Ptas. By then it had more than 1,000 corporate customers.

The last TXK crossbar exchange, at Droitwich, was withdrawn.

The British Approvals Board for Telecommunications (BABT) first issued its approval certificate for BT's bill metering systems, confirming that they meet BABT's stringent control requirements and Oftel's Standard for Public Telecommunications Operators' Meter Systems.

The certificate was renewed in February 1996 when BT remained the only telecommunications company in the UK to have received such approval.

BT's UK operation became the largest single organisation in the world to receive registration under the international quality standard ISO 9001.

This commitment to quality in all its activities was reaffirmed on 23rd June when the UK's two leading independent quality auditors, The British Standards Institution (BSI) and Lloyd's Register Quality Assurance (LRQA), reissued BT with its Corporate ISO 9001 certificate.

This was the only certificate of its kind to be issued jointly by the two organisations, reflecting the huge range of BT activities that it covered. In effect, it was a summary of the 50 or so individual ISO 9000 certificates that had been granted to different parts of the business.

In 1996, the company was also a European Quality Award prize winner in its first year of entry.

Free fully itemised telephone bills were made available to residential customers to cover every single call.

The "It's Good to Talk" campaign was launched this year, featuring Bob Hoskins and the famous phrase, "It's Good to Talk". Directed by Hollywood's Ridley Scott, Hoskins appeared in 51 TV commercials, five voice-overs and 13 radio commercials until 1996.

BT announced in October that it had signed an agreement to sell its subsidiary, BT Marine Ltd ., to Cable & Wireless (Marine) Ltd.

BT introduced the PremierLine discount scheme in June aimed at residential customers with call bills of £100 or more per quarter, although users could still benefit if their call bill fell as low as £40. The scheme entitled customers to;

  • a 15 per cent reduction in direct dialled local, regional, national and international calls.
  • a 10 per cent discount against basic rates on direct dialled calls, including BT Chargecard calls, to mobile or PCN phones, or to Information and Entertainment Services (previously known as Premium Rate Services).
  • 'TalkingPoints' which could be exchanged for free gifts from the PremierLine catalogue, or for AIR MILES at the rate of one AIR MILE award for every 10 points.

Customers received 500 free TalkingPoints when they joined, and one for each whole £1 that appeared on their phone bill (AIR MILES were no longer available for new customers to PremierLine from February 1999, although existing customers could continue to claim them for the duration of their PremierLine contract).

PremierLine cost £24 a year, initially payable annually, although from July 1st 1996 it could be paid in four quarterly instalments of £6 each, with customers receiving monthly BT bills being able to pay in 12 monthly instalments of £2.

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

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

From 3rd April 1997 PremierLine benefits were extended to include free membership of BT's Friends & Family Overseas discount package, which gave a discount of 10 per cent on calls to five international numbers. The improvement meant that PremierLine customers could enjoy combined discounts of 25 per cent off BT's basic call prices on their calls to up to six international numbers, and a total of 15 numbers in all if they were also on BT's free Friends & Family scheme. They could also receive the 15 per cent PremierLine discount on almost all their other calls (local, regional, national and international), all for the £6 per quarter PremierLine fee.

At the same time as the launch of PremierLine, BT announced the introduction of Business Choices, a discount package which offered five different levels of discounts for business lines in an office or site with combined direct dialled call bills of £75 or more per quarter.

The first such scheme of its kind in Europe, Business Choices offered savings for almost every kind of business on direct dialled calls. For UK direct dialled calls these were between 14 and 18 per cent on basic unit rate, depending on the Business Choices level adopted, plus an additional 3 per cent on most direct dialled international calls. Business Choices was a development of the Customer Options range of discount packages such as Option 40, Option 50 and Option 70, which it largely replaced. It was focused entirely on individual business sites, making the structure easier to understand.

The scheme was improved in June 1995 when the discounts available on direct dialled regional and national calls were increased by 3 per cent, bringing them into line with the discounts available for dialled international calls. By this time over half a million business customers were registered with the Business Choices level appropriate for the size of their phone bill.

The maximum saving possible was further increased with the introduction on 1st October 1996 of BT Business Connections, called Key Numbers from May 1996. This scheme gave a 5 per cent discount on direct dialled calls made to ten other numbers, and later a 10 per cent discount on an eleventh key contact number. It could be added to the discounts of up to 21 per cent available on Business Choices Levels 1 - 5, to provide a maximum possible 26 per cent saving on the qualifying calls.

In May 1996 BT announced a further series of enhancements to Business Choices to coincide with the launch of the discount package for very small businesses, BT Business Advantage . Overall, the improvements meant that the price of almost every call made by almost every UK business, no matter how small, could qualify for a tailored BT discount. The latest enhancements to Business Choices in particular meant that businesses were able to save between 27 per cent and 31 per cent on BT's basic regional, national and international call prices by the addition of a further 10 per cent to existing discount levels. They were also able to add 6 per cent to local call discounts, giving overall savings of between 20 per cent and 24 per cent. BT's Key Numbers discount package for customers' most frequently called numbers added another 5 per cent to the improved Business Choices savings for ten nominated numbers (and later a 10 per cent discount on an eleventh key contact number). Together, these schemes could have made total savings of up to 36 per cent possible on many calls. These improvements were estimated to save business customers £220 million a year, in addition to the £1.1 billion savings over the previous three years, including those for residential customers. This was the equivalent of a reduction of 18 per cent in the average business phone bill.

Yet more savings became possible for international calls with the launch of Key Countries discount scheme on 1 January 1998, and for UK calls with the launch on 1st April 1998 of the Key Cities and Key Regions schemes.

These schemes each gave a 15 per cent discount on business calls made up to ten nominated countries in the case of Key Countries, or on calls made to nominated cities or within the customer's own region respectively in the case of Key Cities and Key Regions.

These could be combined with other discount regions to make even more substantial savings. For example, Key Cities and Key Regions, when combined with Business Choices and Key Numbers, produced savings of up to 42 per cent. This meant that from 1st April 1998, for a business that already had BT Business Choices Level 1 and Key Numbers schemes, national daytime calls would have cost just 3.9p per minute with either Key Cities or Key Regions. This was an overall saving of 42 per cent on BT's basic price of 6.8p per minute.

BT introduced the Friends & Family discount scheme in February, aimed at residential customers. The scheme cost a single payment of £4.99 and entitled customers to a reduction of 5 per cent on any calls made to five selected numbers, one of which could be international.

Under Friends & Family Overseas, customers could also nominate up to five additional international numbers which received the 5 per cent Friends & Family discount, for a fee of £1 a quarter. It was free for PremierLine customers from April 1997.

From 28th June 1995, Friends & Family discounts applied to calls made using BT Chargecards to the five numbers nominated under the scheme and discounts from the packages applied to calls made from any phone line at the same address, providing they appeared on the same bill.

From 1st April 1996, a triple improvement was made to Friends & Family:

  • the discount was doubled to 10 per cent. This could be added to discounts of up to 15 per cent available on BT's other residential schemes, giving a possible 25 per cent saving on those calls.
  • The £4.99 joining fee was abolished at the same time.
  • Customers also had a sixth number, their own, added automatically to the scheme, extending the 10 per cent discount to calls they made home using a BT Chargecard.

The effect of these reductions, accompanied by extensive marketing, was to double membership of Friends & Family to five million in fewer than three months.

On 8th January 1997, by which time membership of Friends & Family had risen to nine million, BT announced that the numbers that could be nominated by customers under the scheme would be doubled to ten.

From 1st January 1998, BT introduced Friends & Family Country Calling Plans to give residential customers even bigger savings on calls to many countries. For a fee of just £1 a month customers could save 25 per cent on calls to a country of their choice, at all times. Customers could nominate up to five countries, paying the £1 monthly fee for each country. The saving could be combined with PremierLine and Friends & Family schemes to give discounts of more than 43 per cent on BT basic prices, for qualifying calls.

Also, from 1st May 1998, Friends & Family BestFriend was introduced, giving a 20 per cent reduction to one of the customer's ten specified numbers, in place of the usual ten per cent, so long as it was not an international or mobile number.

Friends & Family remained the leading and most flexible residential discount package at this time. Also available to BT ClickFree customers to reduce pay-as-you go Internet access charges, it could further be combined with other BT discount schemes to maximise savings. The most recent of these was BT Call & Save, announced on 5th January 1999. This scheme gave a 10 per cent discount on eligible calls to residential customers whose quarterly call bill was greater than £25. Eligible calls are direct dialled local, regional, national and international calls, including those calls made using a Chargecard and Ring Me Free card.

BT and MCI Communication Corporation launched Newco as Concert Communications Services in June, a $1 billion joint venture company. This alliance gave BT and MCI a global network for providing end-to-end connectivity for advanced business services. Concert was the first company to provide a single source, broad portfolio of global communications services for multinational customers, and was the first of the large carrier alliances to secure all regulatory and other approvals. As part of the alliance, BT acquired a 20 per cent holding in MCI. Under the terms of the joint venture MCI and its distributors marketed Concert services in the Americas, while BT and its distributors marketed Concert services in other parts of the world.

By November 1998 Concert had become the world's leading provider of seamless global transborder communications services and had more than 4,400 customers in 52 countries. Around 40 per cent of Fortune Global 500 companies used Concert services, accounting for nearly $2.75 billion in committed contract revenue. Concert services were available from 47 distributors worldwide. In 1999, the Concert network had 6,000 nodes deployed in more than 800 cities across more than 50 countries, representing 90 per cent of worldwide business.

Headquartered in Reston, Virginia, Concert Communications Services developed advanced networking services for BT and its distributors to market to global companies throughout the Americas, Europe and Asia.

The Concert portfolio of services was based on intelligent network technology, offering a single point of accountability and consistent and seamless products via a single globally managed network. Concert Frame Relay Service , Concert Managed Bandwidth Service, Concert Virtual Network Service , Concert Inbound Service (a global voice service for call centres) and Concert Packet Services (a managed global data network, also providing remote user access to large host or LAN-based systems, dial up service and remote access to applications and databases of information providers) were among the global solutions the Concert distributors delivered.

Following the completion of a merger agreement between Worldcom and MCI in September 1998, BT acquired from MCI its 24.9 per cent interest in Concert Communications for £607 million . Now that BT wholly owned Concert, work was undertaken to ensure that the group's business would be fully independent of MCI. The costs involved in this work were estimated at £150 million over the two years to March 2000.

Call Return and Caller Display were launched on 22nd November as part of the portfolio of Select Services available to UK customers connected to digital exchanges. Select Services were marketed as early as January 1982 as Star Services following the opening of the first System X digital exchange at Woodbridge , Suffolk in 1981. They became more widely available as the network was progressively modernised, ultimately becoming almost universal when the network became fully digital in 1998. The full range currently includes:

Caller Display: first trialled in December 1992, Caller Display allowed customers to see the number of the person calling them before they answered the telephone. The number was shown on a special unit or phone incorporating a display unit which could be rented or bought.

Call Return: enabled customers to find the telephone number of the last person to call them by dialing "1471". It was decided to offer this facility free permanently as part of the celebrations marking BT's tenth anniversary. By the end of May 1996 all Call Return customers could enjoy an improved service which gave the time and date of the last call, as well as the number, which could be returned automatically by simply dialing "3".

Callers could prevent their numbers being forwarded by dialling "141" before the number they were calling. This did not prevent the tracing of malicious calls through BT's internal Malicious Call Identification system, which BT operated with the police.

By only March 1996, the introduction of these two services had led to a reduction of 20 per cent in the number of obscene, offensive and malicious calls in the UK. By the same time around 12 million BT customers used Call Return each week, making an average six million calls to the service every day, in addition to the two and a quarter million customers who used other Select Services regularly.

Charge Advice: a free service which gave the approximate cost of a call immediately after a customer made it.

Reminder Call: allowed a phone to be programmed to ring back at the desired time as an alarm or a reminder.

Call Waiting: allowed customers to accept another incoming call while they are already speaking on the phone.

Three Way Calling: allowed a third person to join in a phone conversation, enabling customers to set up their own conference calls.

Call Diversion: diverted incoming calls to virtually any other telephone, including a mobile phone. The caller was charged only for their call to the customer's phone, and the customer paid for the diverted call to its new destination.

Call Barring: allowed customers to bar incoming calls from some types of numbers when they did not wish to be disturbed, and to bar all outgoing calls selectively, or calls to just certain other numbers such as international calls, in order to control their bill.

Call Minder: launched in May 1995, it provided customers with their own personal answering service from within the BT phone exchange. It replaced the usual telephone answering machine, and could record up to 30 incoming messages for customers even when they were using their own phone.

Call Sign: a new service launched in December 1998 and aimed at busy households, homeworkers, and small businesses. At a cost of £5 per quarter, BT Call Sign provided customers with an additional phone number on their existing line, which rang with a distinctive sound when called. They would know before answering the phone whether it was, for example, a personal or business call, a call for a different member of the family or for a flatmate. Other uses of BT Call Sign included the ability to identify between a fax or telephone call on the same line or the addition of a new number for customers with more than one business.

The BT Call Sign number could be listed in the local residential or business phone book.

BT and MCI launched Concert Virtual Network Service (Concert VNS) in November. Concert VNS was an advanced international virtual private network aimed at multi-national companies, and was the first such service to be launched. It enabled companies to establish seamless voice and data links between countries where the service was available. Customers could have access to features such as short code dialing, card services and faster call set up, normally available only on a private network. Concert VNS was based on intelligent network technology, which used centralised databases to control and manage calls across the network. It eliminated fixed costs and operational requirements associated with privately owned international networks, and featured a one-stop shop for installation, service and billing. Customers could call multilingual global customer service centres 24 hours a day seven days a week and could be billed for all global services in a choice of currencies and languages.

The service was swiftly expanded geographically to cover more countries, and a second generation of VNS value added features was launched in October 1995. This included Concert Audioconferencing (global private audio conference calls), Concert VNS Calling Card (cost efficient long distance calls when out of the office via either private or public dialing plans), Concert Remote Access (freedom from dedicated access to Concert VNS) and Concert Switched 656/64 Service (targeted at growing videoconferencing and document sharing applications). By May 1997, over 100 multinational customers had chosen the service to meet their global needs, including Unilever and Ford.

Internet use exploded this year. The first cyberbank, First Virtual, opened on the Internet, and in the USA Pizza Hut offered on-line pizza ordering through its Web page. Recognising the Internet's potential, BT launched BTnet, its Internet access service aimed at business customers and resellers, in December. BT provided connectivity via a high-speed transatlantic link to the United States, and to Europe through membership of EBONE (European Backbone). From November 1995, Internet Service Providers, resellers and Corporate Users were able to access BTnet via Concert Frame Relay Service. This service was later being used by around 50 ISPs and was available in Belgium, France, Germany, Netherlands, Spain, Switzerland and South Africa. BT later launched BT Internet , BT Click+ and BT ClickFree, Internet services aimed at residential customers and smaller businesses.


Oftel nominated 16th April as National Code Change day, Phoneday. The code change effectively gave every geographic number an extra "1" after the "0". Leeds, Bristol, Sheffield, Nottingham and Leicester were given new codes and new numbers were introduced to cater for future growth. The international code for calls from the UK changed from "010" to "00".

BT and BNL (Banca Nazionale del Laverno) - one of Italy's leading banks - announced in April the formation of a new joint venture company to supply specialized telecommunications services in Italy.

The new company, called Albacom, was initially owned 50.5 per cent by BT and 49.5 per cent by BNL. It combined the telecommunications activities of BNL and its communications subsidiary Multiservizi Lavoro Sud with BT's network in Italy, which already provided international and domestic managed network services.

In May 1996, Mediaset S.p.A., the media arm of Fininvest, took a 30 per cent stake in Albacom for L50 billion (£22 million), as well as merging its telecommunications activities with Albacom. BT and BNL retained the remaining 70 per cent of Albacom. To consolidate the new partnership, BT and BNL acquired a small equity stake in Mediaset for L170bn (£71 million).

Another company joined the consortium following the announcement by Albacom in July 1997 that ENI, the Italian oil and gas company, would become a major partner. ENI injected capital into Albacom, giving it a 35 per cent stake in the company. BT and BNL now jointly held 45.5 per cent (through Albacom Holdings Ltd) and Mediaset 19.5 per cent. As part of the deal the ENI group transferred its telecommunications division to Albacom which entered into a contract to provide telecommunications services to the ENI group. In addition, Albacom had the right to use ENI group's fibre optic network.

The new company was to be the national distributor of the portfolio of international managed network services offered by Concert, at that time jointly owned by BT and MCI. Albacom originally addressed the liberalised section of the Italian corporate voice and data business telecommunications market, worth around £1.7bn at the time of the joint venture's launch. Its main target clients were the top 3,000 medium to large multi- site companies in Italy. It went on to develop its role as an operator in all telecommunications fields and become the second Italian operator in the fixed telephony market.

BT and German industrial group VIAG - one of Germany's ten largest companies - launched a joint venture company, Viag InterKom KG, in May to offer telecommunications services in Germany.

Headquartered in Munich, VIAG Intercom offered data communications, corporate voice, virtual private networks as well as international voice and data services from Concert, the BT and MCI global networking company. With six branches and a customer service centre in Nuremberg, the company was represented throughout Germany.

On 4th February 1997, BT and VIAG were awarded the fourth mobile licence for the E2-net in Germany. The licence was based on the high capacity DCS- 1800 standard. VIAG Intercom had also been awarded a licence the previous week to offer fixed services from 1st January 1998.

BT and VIAG announced on 6th February 1997 that Telenor - the Norwegian telecommunications operator - had agreed to join VIAG Intercom, taking a ten per cent stake in the company.

VIAG Interkom became the first company in Germany to provide fixed, mobile and Internet services from a single supplier when it introduced its mobile communications and Internet services in 1998.

TPS - the Telephone Preference Service - was set up by the telemarketing and telecommunications industries in January to enable customers to have their telephone numbers removed from lists used by telemarketing companies. BT and other network operators began registering customers under the Service from 30th January. From then on, any company engaged in telemarketing activity had first to check the lists of registered numbers to ensure that calls were not made to such numbers in any phone-based selling campaigns.

BT, Tele Danmark and the Norwegian operator Telenor launched a new telecommunications operator, Telenordia, in the Swedish market in May 1995.

Owned equally by BT, Tele Danmark and Telenor, Telenordia aimed to become the leading alternative telecommunications operator in Sweden. With full regulatory clearance from the European Union already given, the joint venture required no further legal clearance from European or Swedish authorities.

Telenordia offered global voice and data communications solutions via Concert, the global networking company at that time jointly owned by BT and MCI, as well as national data communications services, corporate and public voice services.

Initially, Telenordia's main target customers were Swedish and international companies with significant volumes of national and international telecommunications traffic, and all companies requiring advanced voice and data communications solutions.

Interactive TV trials began with 2,500 households in Ipswich and Colchester. The service enabled customers to chose a range of services from a menu on an ordinary television set including video on demand, shopping on demand, a range of educational programming for homes and schools and a home banking service. The trial was completed in July the following year.

The trial service, which involved some 5,500 users in more than 2,000 homes, brought together the telephone and the television to enable customers to choose and order entertainment and information services from a menu on an ordinary television set.

It comprised nine main services: movies on demand; television programming on demand; children's TV; education; music videos; a community service, a home shopping and home banking service; computer games and an interactive advertising service.

More than 150 content providers were involved in the trial, which gave customers access to about 200 movies at any one time and around 500 television programmes. There were also some 800 education titles, 500 children's programmes, 200 music video titles, 15,000 different product options available to home shoppers, banking services, local information and a computer games service. Using the world's biggest video server and one of the largest databases in Europe, the trial represented one of the first commercial on-line uses of supercomputer technology, with a processing power equal to 5,000 Pentiums and a storage capacity more than 12,000 times greater than the average personal computer.

On 23 June BT officially removed the last Strowger exchange from its public network at Crawford in Scotland, bringing to a close 83 years service from electro-mechanical automatic telephony. This was the latest milestone in BT's £20 billion investment in the UK's phone network - enough to build two Channel Tunnels - over the previous 11 years. In 1984 BT had inherited a network of more than 6,700 telephone exchanges, many of which were based on electro-mechanical technology developed almost 100 years previously . With the upgrade at Crawford - and also Crawfordjohn and Elvanfoot, also in Scotland, which were replaced the same day - they had all been replaced by digital or modern electronic exchanges.

New exchanges, using the most modern computerised technology, have no moving parts so they are much more reliable and provide almost instant connections and clearer conversations. All of BT's exchanges now allowed TouchTone dialling, fast call connection, fully-itemised bills, and selective pricing discount schemes, as well as per second pricing. In addition, more than 80 per cent of all customers were connected to the very latest digital exchanges, such as the new switch at Crawford. As a consequence they could enjoy a range of further services, such as Caller Display , Three-Way Calling, Call Diversion, Call Waiting , videoconferencing, and Call Minder - an answering machine service in the telephone exchange that could record incoming messages even while the phone was in use. In addition to bringing a much more reliable network and a range of new services and facilities for all of BT's customers, modernisation was accompanied by real reductions in the overall costs of telephone services.

BT's investment in the future of UK telecommunications was also an investment in UK industry. Virtually all of the £20 billion total investment had been spent with companies manufacturing in the UK. GEC Plessey Telecommunications Ltd (GPT) and Ericsson built all digital telephone exchanges in the UK. By this time, GPT had provided more than 4,500 exchange units, and Ericsson about 2,000.

The last TXE2 exchanges in the UK (Ballycastle in N Ireland, Llandovery in Wales and Ramsbury in England), were withdrawn from service, also on 23rd June.

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

The last electromechanical switching system was withdrawn from the UK network with the closure on 12th July of the relay-operated IAX (Island Automatic Exchange) on Foula, in the Shetland Isles. The UK network became totally digital on 11 March 1998 with the conversion of Leigh-on-Sea and Selby TXE4s to System Y (AXE 10) and System X respectively.

BT introduced per second pricing on 28th June, and was the first major telephone operator, anywhere in the world to change its entire network over to per second pricing by abolishing unit-based charging for all its customers, which had been in operation since 1958.

At the same time, BT introduced price cuts of £310 million a year. Two-thirds of the total savings - £204 million - came off the cost of local calls, with an overall 9 per cent reduction benefiting both business and residential customers. Daytime local calls made during a weekday cost 4p a minute after 28th June. Throughout Saturdays and Sundays local calls cost just 1p a minute - an average reduction of 22 per cent - subject to the 5p minimum charge. Previously, one 5p unit provided 3 minutes and 40 seconds of local call time at the cheap rate.

Residential customers would save a total of about £168 million in a year, or an average of £8.40 (ex VAT) for every customer. The savings would bring the average residential customer bill, including rental charges, down by 3.7 per cent, to £226.45 (ex VAT) a year. Call charges, excluding rentals, came down on average by 5.6 per cent.

Businesses enjoyed the remaining £142 million of reductions, an average of £22.75 (ex VAT) for every business line. The average bill for a business customer, also including rental charges, came down by 3.9 per cent to £509.50 (ex VAT) a year. The average business call bill, excluding rental, came down by 5.1 per cent.

BT public payphones continued to charge on the basis of a 10p unit, and some fixed-price calls, for example the 25p for a UK directory enquiry, and calls to some other more specialised services, were not affected by per second pricing. BT Chargecard calls used per second pricing, but different rates applied.

Since December 1993, BT had simplified charging and reduced prices by about £700 million, even before this latest reduction. These latest cuts meant that BT would have cut prices by more than £1 billion during the same period, and met its obligation to reduce prices by about £400 million in the year to July 31 1995, as agreed with the Office of Telecommunications (Oftel). Furthermore, more than £200 million of these reductions contributed towards the price cuts that BT needed to make in the year beginning on 1st August 1995, ensuring that customers would enjoy the earliest possible benefit from lower prices.

These latest price cuts meant that BT had reduced the average residential customer bill by 10 per cent since December 1993 and the average business bill had been cut by more than 13 per cent. Average call bills, excluding rentals, had fallen by 19 per cent for businesses and 17 per cent for residential customers over the same period.

Overall, bills had been reduced in real terms by 30 per cent for residential customers and 48 per cent for businesses since 1984.

These reductions were followed by a series of further price cuts . BT also proceeded to introduce a variety of discount schemes for both residential and business customers, in addition to those already available. This was a direct consequence of the flexibility offered by the newly completed all digital network for selective pricing schemes.

CampusWorld was launched on 8 September, offering the world's largest on-line network providing a dedicated service for education.

A new discount scheme for business customers, BT Business Connections, was launched on 1st October. It gave a five per cent discount on direct dialled calls made to ten other numbers. It could be added to the discounts of up to 21 per cent available on BT's Business Choices Levels 1 - 5 schemes, to provide a maximum possible 26 per cent saving on the qualifying calls. There was a single joining fee of £10, excluding VAT, for each site covered. Customers could nominate which ten numbers they wished to be included for Business Connections discounts. Two could be international numbers. BT at the same time also increased the benefits of other discount schemes, Friends & Family , Business Choices, PremierLine and Option 15.

A report by management consultants Touche Ross the following year showed that small to medium business customers could save over 8 per cent on their phone bills by using BT rather than its competitor Mercury through BT's various discount schemes.

Business Connections was known as Key Numbers from May 1996 following the launch of the new Business Connections nationwide sales and support team dedicated to small to medium sized businesses.

From 17th July 1997, all ten nominated numbers under the Key Numbers scheme could be international, not just two as previously.

Later, an eleventh key contact number could be nominated to receive a ten per cent discount, and from 1st April 1999 the £10 fee was waived.

BT launched telephone number portability between its network and those of rival companies, following technical and customer trials during the summer. This was the first full-scale implementation in the world. The facility allowed customers to retain their number when they transferred between telephone companies. Technically, the call was first sent to BT and then sent on to a rival company where appropriate.

The Monopolies and Mergers Commission (MMC), following a referral by Oftel, published a report in December which supported BT's view that the latter should not have to bear the estimated cost of £200 million in providing the service, and that competing companies should share costs.

The first BT shop opened for business on the Internet in time for Christmas 1995. By taking space at Barclay Square, Britain's most popular Internet shopping mall, BT could keep its shop open 24 hours a day to meet the Christmas rush.

Internet shoppers accessing the BT shop on the site could purchase up to 18 BT products by credit card. Users simply clicked on the BT shop name and browsed through the range of cordless phones, caller display phones, pagers, fax machines, answering machines, and other products. This was BT's first retail presence on the Internet, although BT operated a chain of more than 80 high street shops in prime locations where a comprehensive range of products and services could be bought or rented.

As well as its presence at Barclay Square, BT launched a number of initiatives including interactive television trials; CampusWorld, the world's largest education on-line service and, together with ICL, a joint trial of an interactive education system in Bristol involving 11 schools. BT also had BTnet, BT's Internet access service aimed at business customers, and was trialling Wireplay, a nationwide dedicated computer games network which allowed players to compete with each other over the telephone network.

BT spread more 'Happy Talk' at Christmas and the New Year by extending its evening and night-time call period during the festive season. It also reminded customers who would be phoning greetings to friends and relatives overseas about the new '00' access code for making international calls from the UK, and the '01' UK national dialling codes, introduced at Easter.

BT's evening and night-time rate applied to all inland calls made on Christmas Day, Boxing Day and New Year's Day. International calls were normally charged at a daytime rate, or a cheaper evening, night-time and weekend rate. The cheaper rate applied to international calls throughout the same three days. All inland calls made on December 23, 24, 30 and 31 were charged at the weekend rate, as normal.


Sir Peter Bonfield, the former Chairman of ICL, joined BT as Chief Executive on 2nd January. He took up his post after the announcement the previous November that Sir Iain Vallance would be splitting the roles of Chairman and Chief Executive. Sir Iain continued as Chairman of BT. Sir Peter, knighted in the 1996 New Years Honours for services to information technology, promised a "roller coaster ride" for BT people as BT continued its global expansion. Sir Iain subsequently became part time Chairman from 31st July 1998.

During January and February, BT abolished the reconnection charge for residential customers at premises which still had all the phone wiring intact although service had been switched off at the BT exchange. This was a successful promotion which was taken up by over 82,000 households.

From 1st April 1999, BT scrapped the £9.99 reconnection charge for residential customers altogether. Taking over an existing BT residential line was now free, even if there was a break in service, so long as the old wiring was still in place.

At the same time, BT cut the cut of installing a completely new residential line from £116.33 (£99.00 ex VAT) to £99.00 (£84.25 ex VAT).

Between May and July, BT ran a scheme for business customers which gave them the chance of a second phone line for half the usual price. The special offer applied to the second business line provided to customers at the same address, and covered installations made between May 1st and 31st July this year. During this period customers could have the second line installed for just £49.50 instead of £99.

This offer was repeated for both business and residential customers in 1999. Between 1st April and 30th June 1999, residential customers could have a second exchange line installed for £49.50, instead of £99 incl. VAT. Business customers paid £49.50 excl. VAT, instead of £99 for an additional line.

Over the same period customers could also get connected to BT Highway and ISDN2 at half the usual price. The special offer of £50 (excluding VAT) off connection or conversion on all pricing options meant that customers taking the most popular options with inclusive calls would pay half the normal conversion charge.

Customers of other BT services "FeatureLine and ISDN30" also received a reduction on lines ordered between 1st April and 30th June 1999.

BT added its pricing discount schemes with the introduction of the Corporate Choices package, which allowed discounts of up to 22.5 per cent for larger business customers. Corporate Choices benefited companies which operate over several sites with phone bills of more than £400,000 a year.

There was a £6,000 annual fee for Corporate Choices in addition to the relevant quarterly site fee. Corporate Choices replaced and improved upon Tiers 1 to 3 of the Business Choices 2000 Series of discount packages through a combination of bigger discounts and lower entry fees.

Customers could also combine Corporate Choices with BT's Business Connections package which provided an additional five per cent discount on calls to 10 most frequently dialled numbers for a one-off £10 fee for each site covered.

BT and its Globetel consortium partners announced in February the formation of a new company in Israel called Newtone - The Israeli Company For International Telecommunications Ltd. Trading as Newtone, the company was a joint venture between BT, MCI, and three Israeli partners; Tadiran Ltd. (Tadiran), Idan Software Industries I.S.I. Ltd. (Idan) and Darcom Ltd. (Darcom). It was to tender for one of two licences for international telecommunications services in Israel. The joint venture shareholding was BT 25 per cent, MCI 15 per cent and the three Israeli partners 20 per cent each.

BT had formed a consortium with the Israeli companies in March 1995 in anticipation of the Israeli Ministry of Communications granting international carrier licences.

BT launched its mass market Internet service on 29th March - BT Internet - announced on 26 February. It was aimed at residential and small business customers, as well as users new to the Internet. A full range of Internet services was offered, including world-wide electronic mail, file transfer, and access to vast quantities of information through the World Wide Web and discussion groups. Features included in BT's unlimited monthly service were five free e-mail boxes as standard, 2.5Mb of free Web space, and fast connection through 33.6 Kbps modems at local call rates.

BT Internet was competitively priced with a one off registration of £20 (incl VAT) and a flat monthly subscription fee of £15 giving unlimited use of all BT Internet services and applications. Alternatively, customers could pay an annual subscription fee of £150 giving them a discount of 16 per cent. BT Internet billed customers directly for their subscription only. Calls to service were charged at local rate throughout the UK and billed separately as part of the customer's regular phone bill.

BTnet, the Internet access service aimed and business customers and resellers continued to be available.

On 3rd May, BT announced unlimited ISDN access to BT Internet at a monthly subscription of £23.50. This package was aimed at users who wanted faster access to stills, video clips and sounds found on the Web, but who found response times using conventional modems then available too slow. Such users included schools and universities, and teleworkers, and now had access to the Internet at a speed of 64kbps, more than twice the speed of the fastest modem connection then available.

Charges were reduced by over 20 per cent in January 1997; the one off registration charge of £20 was abolished, and the monthly subscription was reduced to £11.75.

The ISDN access option was halved at the same time to £11.75, and the subscription to customers who paid annually reduced to £129.25, equivalent to one month free.

In 1998 BT launched a pay-as-you-go service called BT Click for less frequent Internet users, followed by BT ClickFree in February 1999.

In May 1999 BT's consumer Internet portfolio was re-launched under the new brand name, including the existing BT ClickFree. The new incorporated all the benefits of BT ClickFree, including free unlimited access for the cost of a local call and free unlimited e-mail addresses from talk21.

In April, BT acquired Rijnhaave, a leading systems integration business in Holland, which was incorporated into Syntegra, BT's own systems integration business.

BT launched Business Connections on 7th May, a nationwide sales and support team dedicated to helping the UK's growing businesses to get the best out of their phones and to exploit the advantages of new telecoms technology. At the centre of BT Business Connections was a new, universal, free phone helpline - 0800 800 800, replacing "152" for all business customer enquiries. BT Business Connections provided expert advice and assistance for business customers who wanted to know more about any aspect of their telecommunications. Advice covered what was new in the world of computers, telephones, and information technology, to BT's range of price discount schemes that cut their phone bills.

BT's discount scheme for frequently-called numbers, formerly called Business Connections, was henceforward known as Key Numbers.

BT acquired Bell Canada's 25 per cent stake in Clear Communications, New Zealand's second largest telecommunications company. BT joined existing shareholders MCI, Television New Zealand and Todd Corporation as an equal 25 per cent shareholder in the company.

Clear Communications was the second carrier in New Zealand. It commenced private network services in January 1991, national toll services in May 1991 and international operations in December 1991. At the time it had more than 22 per cent of the national and international markets and had recently reached agreement with Telecom New Zealand on local interconnect.

BT appointed Global TeleSystems Group (GTS) in May as its distributor of Concert Services in the Czech Republic.

GTS CzechCom was a subsidiary of Global TeleSystems Group Inc. (GTS) of the US. The GTS Group operated in markets throughout Europe and Asia, with 18 businesses worldwide in 1996, and principal offices in Monaco, Brussels, Moscow, Beijing and Budapest. The company at that time operated the largest private VSAT (very small aperture) satellite network in Central and Eastern Europe.

It provided network and service solutions to government, commercial and telecommunications carriers using satellite, microwave, radio and fibre technologies.

In October, BT appointed GTS as it distributor of Concert services in Hungary.

Concert InternetPlus, the world's first high-speed, high-reliability global Internet "backbone" network was launched in June. Concert InternetPlus services were to provide Internet service providers, international carriers and businesses with an array of Internet and "Intranet" transport, dedicated and dial-up access and value-added services available from more than 1200 locations in 70 countries.

BT launched its high-speed CellStream service - the UK's first national ATM (Asynchronous Transfer Mode) service.

ATM was a key technology for future integrated multi-service communications as it was designed to handle, in a flexible, cost effective and scaleable manner, large volumes of Internet (IP) traffic and multimedia applications which were a mix of voice, data and image.

BT gained invaluable ATM experience following the launch of the CellStream service. In February 1998 it announced that it planned to invest in growing and developing that network to support its existing and future broadband communications services, specifically the development of a national broadband infrastructure for the integration of voice, data and video applications over a single network. BT would create a common multi-service broadband network to meet demand by business and residential customers up to the millennium and beyond, using the latest ATM technology.

BT launched a new discount package on 1st July, BT Business Advantage, which gave businesses which spent as little as £10 a quarter on calls ten per cent off the cost of UK and international calls. A quarterly fee of just 99p was charged. BT identified businesses which spent more than £10 a quarter on calls and which were not already on a discount scheme for inclusion on the new BT Business Advantage package. The ten per cent discount applied to all local, regional, national and international calls.

BT ran the Surprise Saver, a promotional discount scheme which ran throughout July and August. The Scheme gave a 25 percent discount after the first ten minutes of a call. The discount applied to all areas, charge bands, existing discount scheme customers and calls made on a BT Chargecard. Only calls made from public payphones, and to mobile numbers and premium rate and information services, did not qualify.

BT announced in July the formation of a joint venture company in Korea with DACOM, the Korean telecommunications common carrier. Under the terms of the agreement the joint venture company provided advanced business communications services for companies in Korea and offer its customers access to the world-leading set of services from Concert.

BT announced a programme to provide free conversion to modern plug and socket connections for customers who still rented phones with permanent direct wiring. The normal £29.38 conversion fee was waived during a special six-month offer from 16th September.

This promotion was aimed specifically at customers who still had direct wired phones, and as a consequence could not choose to buy or rent modern phones which provide access to newer services such as Caller Display, Call Waiting and Call Divert. Most telephones and accessories designed to meet the needs of customers with physical disabilities or sight and hearing impairments also require plug and socket connections. They include telephones with large buttons and inductive loop hearing assistance. Modern plug and socket connections also enable customers to join community alarm schemes for the elderly and those with disabilities.

BT already subsidised the price for plug and socket conversions by about £20 before this promotion. It also provides plug and socket connections free when a direct wired phone needs repair. Free conversion continued for vulnerable customers after the end of the special offer period. BT worked with Oftel and other representative consumer organisations to define which customers would be eligible.

Residential customers who chose to retain their direct wired dial telephone continued to enjoy a £1.23 (inc VAT) per quarter rebate on the normal £4.47 rental for a dial phone. The rebate for business customers was £1.05 (ex VAT).

Exchange line rentals from July 1st increased to £25.69 per quarter for residential customers, and £41.13 (£35 ex VAT) for businesses. The rental changes amounted to an increase of 3.7 per cent for residential customers and 2.4 per cent for businesses, and were below the 3.9 per cent increase to the Retail Price Index since they were previously last reviewed in February, 1995, when they had risen by 4.6 per cent. The latest increases amounted to less than 1p a day.

BT promised that no customer's bill would l increase by more than the current annual rate of inflation - 2.4 per cent in April 1996 - even with the new rental changes.

Line rentals were increased again from July 1997, for business customers again from 1 August 1998 and for residential customers from 1st November 1998.

BT unveiled a new design for its public phoneboxes in July, following extensive research into customers' opinions. The new phonebox, designated the KX+ range and the first design for more than 10 years, was less angular, with a curved roof, and contained a small seat and a shelf for writing or placing a bag.

Other features were a lower handle on the outside of the door to help customers with disabilities and a new closing mechanism to make the door more robust. Payphone equipment inside took cash, phonecards, credit cards and chargecards, with these payment options clearly written on the outside of the box rather than using red or green colour coding which was the current practice.

Research for BT Payphones revealed widespread appreciation of the availability, maintenance and reliability of the existing payphones and the standards to which

they were maintained. Despite liking certain features of the stainless steel designs introduced from the 1980s, such as the fact that they were lighter, more airy and more accessible for people with disabilities than the traditional style, customers felt that there was still room for improvement. Popular opinion was that the square shape seemed clinical and that something softer and more rounded would be preferable. The colour of the phonebox itself, particularly the roof, had to satisfy a number of requirements, in particular it had to be practical to keep clean and bright enough for customers with visual impairments.

After a number of experiments, red proved to be the colour that best met the required criteria, with the added advantage that it reflected something of the character of the traditional red K6 kiosk designed by Sir Giles Gilbert Scott in the 1930s.

The new design resulted from collaboration between GKN, who manufactured the existing style of payphone, and the design agency DCA. It was also extremely cost effective to produce, as it used the same basic carcass as the existing payphone housing.

The first of the new look phoneboxes appeared on the streets in the early autumn, with approximately 5,000 installed over the next year.

BT currently operates a network of 140,000 public payphones of various designs across the UK.

BT and News International announced plans in September to launch Springboard Internet Services Ltd. (SISL), a 50:50 joint venture company between BT and News International Ltd. providing an Internet service designed for the UK mass consumer market. LineOne, the brand name given to the service, delivered entertainment, information, home shopping and education to UK homes via the Internet.

Launched in January 1997, LineOne provided fast and easy access to content drawn from major News International and News Corporation brands, such as The Times, The Sunday Times, The Sun and the News of the World.

In March 1998, United News & Media joined BT and News International as an equal partner in LineOne.

A strategic collaboration with Microsoft was announced in August under which customers of BT's mass market dial-up Internet service - BT Internet - would be offered Internet Explorer 3.0, then the latest Internet browser from Microsoft.

From the end of September, BT Internet customers were offered a complete Internet software solution sourced from Microsoft. The software package comprised Internet Explorer 3.0 as well as Microsoft's companion e-mail, news and chat applications, communication stack and dialler facilities.

In this year, BT was a European Quality Award prize winner in its first year of entry.

BT introduced the International Weekend Rate on 7th September, cutting between five and 23 per cent off international calls made between midnight Friday and midnight Sunday.

BT had reduced its main prices by £1.3 billion over the previous three years and was committed to cutting at least £300 million more off prices over the next 12 months.

International weekend rate savings included:

  • USA and Canada (23 per cent off calls)

  • India, Pakistan, Bangladesh and Sri Lanka (21 per cent off calls)

  • Hong Kong and Singapore (19 per cent off calls)

  • Australia, New Zealand and Japan (15 per cent off calls)

  • Western European countries including France, Germany, Spain, Italy, Portugal, Holland, Switzerland and Belgium (12 per cent off calls)

  • South Africa, and from the UK mainland to the Irish Republic (8 per cent off calls
  • All other destinations (between 5 per cent and 9 per cent off calls)
BT's international Weekend Rate runs from midnight, Friday to midnight, Sunday. International calls made at weekends previously cost the same as those made during weekday evenings and at night-time. The Weekend Rate was not to apply to international calls made from BT public payphones or with BT Chargecards, to international ISDN and 0800 calls, or to INMARSAT and maritime services.

Further international call reductions were introduced to many daytime, evening and weekend calls on some of BT's most popular routes from 8th October.

These new cuts were all in addition to the ones introduced on 7 September when BT introduced the International Weekend Rate, and included:

  • The Irish Republic (20 per cent off weekday daytime calls).

  • United States and Canada (25 per cent off weekday daytime and evening calls, with a 10 per cent cut at weekends).

  • Japan (25 per cent off weekday daytime and evening calls with a 15 per cent cut at weekends).

  • Australia and New Zealand (20 per cent off weekday daytime and evening calls to with a 10 per cent cut at weekends).

  • Hong Kong and Singapore (25 per cent off weekday daytime calls to with a 10 per cent cut for weekday evening calls).

  • Thailand, Taiwan, South Korea, Indonesia, Malaysia, the Philippines and China (20 per cent off all calls).
Combined with BT's new International Weekend rate, these reductions meant that the cost of a call to the USA or Canada on a Saturday or Sunday had fallen by 31 per cent since the beginning of September 1996. Weekend calls to Australia or New Zealand had come down by 24 per cent overall during the same period.

Further reductions followed in 1997.

BT cut national evening and night-time call charges by 20 per cent - from 5.9p a minute to 4.7p - from 8 October. At the same time, national daytime calls were cut by 10 per cent. Together with the reductions in international calls introduced at the same time, this resulted in a further £214 savings, bringing total price cuts to more than £1.5 billion in three years.

This was followed by a further 10 per cent cut to national daytime calls and a 3.8 per cent cut to regional daytime calls on 29th May 1997, also simplifying charging by creating a new single rate for all long distance UK daytime calls. In the past 18 months BT had also cut the cost of calls to every country in the world - some by up to 44 per cent.

BT went on to reduce the cost of national calls made during weekday evenings and nights by a further 10 per cent from 1st October 1997; in total a 28 per cent cut in a year. This meant that the cost of these calls came down from 4.7p a minute to just 4.2p.

At the same time, BT reduced the cost of daytime calls made to Cellnet and Vodafone cellular phones by 12 per cent - from 36.5p a minute to 32p - reflecting reductions in payments which BT made to the two mobile operators. BT charged by the second, and there was a 5p minimum charge for all calls.

Overall, BT's price cuts over the four years to 1997 meant that the average residential call bill came down by 32 per cent in real terms, while the average business call bill came down by 35 per cent.

Further cuts were introduced on 17th January 1998 when BT cut 10 per cent off the cost of long distance calls made within the UK at weekends. This reduced the cost of a weekend long distance regional or national call from 3.3p to 3p per minute, incl. VAT. This cost was further reduced with BT discount schemes.

From 29 April 1998, the cost of local calls made on evenings and overnight, Monday to Friday, came down by 10 per cent, from 1.7p a minute to 1.5p, incl. VAT. This meant that since December 1993, BT had cut prices by more than £2 billion. In real terms, these cuts resulted in an average reduction of 34 per cent on international calls, 45 per cent on national calls over 35 miles, 28 per cent on regional calls under 35 miles, and almost 25 per cent on local calls.

BT and NS (Nederlands Spoorwegen) - the Dutch national railway network operator - celebrated the launch in September of their joint venture company in the Netherlands, formed in March the same year. The new company, called Telfort, B.V. was created to address the Dutch business community, and was jointly owned 50-50 by BT and NS.

Headquartered in Amsterdam, Telfort initially offered data, corporate voice and virtual private networks, as well as international voice and data services from Concert Communications Services. The company also offered management and outsourcing services.

Plans for Telfort to address the Dutch residential and mobile markets were also developed, with the firm intention of positioning the joint venture as the alternative telecommunications company in the Netherlands.

It was awarded a fixed licence in November 1997, and on 26th February 1998 the Dutch Government also awarded a mobile licence to Telfort. The award was for a national DCS 1800 mobile licence and was the result of a Government-conducted auction. Together with the fixed licence awarded the previous year, the mobile licence now enabled the company to develop integrated communications solutions tailored to the Dutch residential and business markets.

Telfort launched the first fully digital service in the Netherlands on 30th September. Known as Telfort Pak&Bel (Take & Talk) the GSM 1800 network delivered better sound quality, improved ease of use and increased value for money.

From 23rd September, three pricing options were available to customers of ISDN 2 - BT's high speed digital communications service aimed at small to medium sized businesses, or branch offices of larger organisations - which had been launched five years previously.

Start Up was packaged for first-time users who, for a lower connection fee of £199 and higher rental, would receive a yearly call allowance of £90 for two years, and £210 a year thereafter. By spreading the cost over two years, businesses could save up to 14.5 per cent in the first year on previous ISDN 2 prices.

Fast Start was aimed at customers with experience of ISDN and others who were confident of their usage rates. For a connection fee of £680 and rental of £130 per quarter, Fast Start gave them a call allowance of £650 for the first year and £210 a year thereafter. This was a 25 per cent saving on previous ISDN 2 prices in the first year.

Low Start was targeted at low users or customers who used ISDN to provide back up for private circuit services. The connection charge remained unchanged, but rental was increased.

Existing customers could switch to the new Standard rental option comprising a quarterly rental of £130 and an annual call allowance of £210 per annum, saving more than eight per cent on previous ISDN 2 prices.

The introduction of call allowances made it easier for businesses to try out new and innovative applications. They complemented the on-going reduction of BT data call prices which had been reduced by more than 26 per cent in the previous three years and were among the cheapest in the world.

UK ISDN calls were priced at the same rates as normal telephony and all normal discounts applied. Consequently, ISDN users could save up to 31 per cent on BT's basic, regional, national and international call prices with its recently improved range of Business Choices packages. Customers could obtain an additional five per cent saving on 10 direct dialled calls with Key Numbers for an initial subscription charge of £10 (this fee was waived from 1st April 1999).

Customers could also take advantage of long term discounts for both ISDN 2 and ISDN 30 services, which were introduced on 1st January 1995. Companies which opted for three, four or five year contracts benefited from discounts on rental charges ranging from three, seven and ten per cent respectively.

Following concerns expressed by Oftel over potential difficulties to competitors, the pricing structure was amended from 3rd October, whilst retaining its innovative features, benefits and customer choice;

The Start Up connection charge was unchanged at £199. The rental charge rose by £15 per year, offset by increases to the inclusive call allowance of £15 for each of the first two years and £20 thereafter.

The Fast Start connection charge fell to £500, the rental rose by £15 and call allowance fell to £355 in the first year and changes to £230 per year thereafter.

The Low Start connection charge remained unchanged, but the rental charge fell to £352 per year.

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

Eighteen of Europe's network operators formed a consortium to work on further research and development into ATM (Asynchronous Transfer Mode) technology and to continue experiments of advanced high-speed services and applications. Known as 'JAMES' (Joint ATM Experiment on European Services), it built on the success of the European ATM pilot which ran from July 1994 and December 1995.

ATM was the key enabling technology for future integrated broadband communications as it was designed to handle multimedia applications which are a mix of voice, data and image.

The eighteen operators were Belgacom, BT, Deutsche Telekom, FINNET International, France Telecom, OTE, Portugal Telecom, Post & Telekom Austria, PTT Telecom Netherlands, P&T Luxembourg, Swiss Telecom PTT, Telecom Eireann, Telecom Finland, Telecom Italia, TeleDanmark, Telefonica de Espana, Telenor and Telia. These engaged in joint R&D, pilot implementations and demonstrations in two main areas; ATM-based interconnect services of fixed or variable capacity, and ATM-based interactive multimedia applications in anticipation of emerging demands of the research community and other advanced users.

BT and New World in October announced that they had reached an agreement that ensured that customers had the benefit of both New World's new red livery phone box and BT's phone boxes throughout the country.

Earlier in the summer, BT had obtained an injunction to stop their competitors, New World Payphones, from using the old-style phone boxes designed by Sir Giles Gilbert Scott, the K2 and K6. New World wanted to put the old style phone boxes up in parts of London where the local planning authorities wanted to compel the installation of old style phone boxes at new sites.

Part of the agreement was that BT would make available to NWP sites where BT's modern kiosk was already installed, so that planning authorities requirements did not prevent the public taking advantage of New World's service in the key tourist areas. At the same time, BT had the sole right to install the old phone box when appropriate.

Oftel's Advisory Committee on Telecommunications for Disabled and Elderly (DIEL) supported the action by the two telephone companies, pointing out that, although the traditional boxes may be pleasing to the eye, they can present problems to customers with disabilties.

In 1997, BT decided to grant licences for other competitors to use its trademark K6 kiosks, in order to help promote customer choice.

BT launched Concert Packet Services in Greece in October and appointed Space Hellas SA as distributor.

Space Hellas was a wholly Greek-owned company and one of Greece's biggest commercial and technical corporations in the field of high technology electronic systems, with experience in the fields of international data and telecommunication services, including connection to the Internet and electronic data exchange.

This strategic alliance between BT and MCI progressed further with the announcement on 3rd November 1996 that they had entered into a merger agreement to create a global telecommunications company called Concert plc, to be incorporated in the UK with headquarters in both London and Washington DC.

The merger with MCI would give BT's shareholders more exposure to the United States, the world's largest and most dynamic marketplace, together with the growth momentum and market expertise of MCI, known for its success in the competitive US long distance market. By combining with BT, MCI would gain access to BT's technical expertise in the provision of local market products and services, and the substantial financial resources and global position of BT.

The merger proposals subsequently met with approval from the European Commission, the US Department of Justice and the US Federal Communications Commission.

Nevertheless, BT ultimately decided on 9th November 1997 to sell its stake in MCI to the US company Worldcom for $7 billion or $51 per share. This followed Worldcom's successful rival bid for MCI on 1 October. Worldcom's offer, which was followed on 15th October by an unsuccessful counter bid from GTE, America's largest US based local telecommunications company, was made after BT and MCI had renegotiated the terms of the planned merger following a profits warning from MCI in July 1997.

Following the completion of the MCI-WorldCom merger on September 15th, 1998, BT sold its 20 per cent holding in MCI to WorldCom. The proceeds totalled £4,159 million on which an exceptional pre-tax profit of £1,133 million was realised. In addition, BT had received a further $465 million severance fee on 12th November 1997 for the break up of the proposed merger. The settlement was hailed as an excellent deal, with immediate benefits to customers and investors.

Also following the completion of the Worldcom and MCI merger agreement in September 1998, BT acquired from MCI its 24.9 per cent interest in Concert Communications for £607 million. Now that Concert was wholly owned by BT, work was undertaken to ensure that the group's business would be fully independent of MCI. The costs involved in this work were estimated at £150 million over the next two years to March 2000.

BT later announced the formation of a 50:50 global venture with AT&T for their trans-border telecommunication activities, to serve the needs of multinational companies and the international calling needs of individuals and businesses.

BT was chosen as the prime contractor in November to work with the Ministry of Defence on an advanced national fixed telecommunications network for the UK armed forces.

The Defence Fixed Telecommunications System (DFTS) contract, worth an estimated £1 billion over ten years, was to deliver voice, data, LAN interconnect and other wide area networking services for the Navy, Army and Air Force. The integrated service was to be designed to improve inter-operability, resilience and operational effectiveness while cutting the MoD's ongoing costs.

BT's solution for DFTS harnessed the principles of the Government's Private Finance Initiative (PFI), and applied these for the first time in a telecommunications context. BT would have responsibility for the design, financing, operation and ongoing management of all DFTS services, giving guaranteed levels of performance and ensuring technology updates to let the MoD benefit from new developments.

BT's proposal drew heavily on its expertise in building and operating public networks in the UK and overseas. It established a dedicated organisation - called INCA - to manage the DFTS prime contract, supported by its partners in the bid: Lockheed Martin, a world leading defence and systems integration specialist; GEC Marconi Secure Systems, acknowledged experts in communications and information security; GPT Strategic Communications Systems, providing specialist military telecommunications systems and support.

BT and Tele Danmark were selected in December as the international partners for Newtelco which intended to become Switzerland's second licenced operator.

The Swiss founding companies of Newtelco were Schweizerische Bundesbahnen (the Swiss Federal Railways), Migros-Genossenschafts-Bund (the largest retailer in Switzerland), and Union Bank of Switzerland (the leading Swiss bank). BT and Tele Danmark would hold a significant minority stake, with the Swiss sponsors retaining the majority.

The agreement extended Tele Danmark's relationship with BT. Together with Telenor, the two companies had previously launched a joint venture, Telenordia, in Sweden. Tele Danmark were also distributors of Concert Services in Denmark.

Headquartered in Zurich, Newtelco planned to offer liberalised communications services in voice, data and multimedia services. Newtelco used the rights of way and fibre optic network of the Swiss Federal Railways as the backbone for its telecommunications network.

The Swiss telecommunications market was the eighth largest in Europe at the time, and was valued at £5.8 billion.

BT ran a "three for the price of two" twelve day Christmas and New Year phone call sale for its 20.5 million residential customers.

Promoted as the Seasonal Saver, this special offer applied to BT's regional and national longer-distance UK calls which were dialled direct from BT residential phone lines. It ran from Boxing Day until midnight on 6th January 1997.

Every third minute of a qualifying phone call during this period was free; after two minutes under the Seasonal Saver BT gave customers the third minute - or part of a minute - free. There was no time limit on calls, so the sixth minute, ninth minute, twelfth minute, and so forth, were all free.

In addition, calls made on Christmas Day, Boxing Day and New Year's Day - including local, regional, national and international calls made by residential customers or businesses - were charged at the cheaper evening and night time rate, whatever time they were made.

All savings were credited automatically without the customer having to register or apply, and Seasonal Saver calls were highlighted on itemised bills.

Savings possible under BT discount schemes applied on top of all the special Christmas prices.


BT acquired a significant stake in Bharti Cellular Ltd. (BCL), the largest mobile operator in India.

The BCL consortium then consisted of Bharti Group; STET of Italy; GMC - a subsidiary of CGE Group of France; Emtel - the cellular operator in Mauritius; and MSI UK.

The Indian Department of Telecommunications (DOT) had to approve BT taking over GMC, with its 22.5 per cent stake in BCL.

BCL operated one of the cellular services in the Delhi license area comprising Delhi, Faridabad, Noida, Gurgaon and Ghaziabad. With more than 65,000 subscribers it had the largest subscriber base of all the Indian cellular operators.

From 13th January, the 10 per cent Friends & Family discount applied to calls to 10 numbers nominated by the customer, instead of the previously permitted five.

BT Internet charges were reduced by over 20 per cent on 23rd January. In addition, the one off registration charge of £20 was abolished, and the monthly subscription was reduced to £11.75.

Oftel announced in January that code and local number changes would be required to create additional numbering capacity in London, Southampton, Portsmouth, Cardiff and Northern Ireland. These changes would take place on 22nd April 2000.

Oftel's statement also identified cities and areas that could need additional capacity during the next 15 years.

In January 1998, Oftel added Coventry numbers to the list of those to be changed in 2000.

In advance of these major changes, the changes to dialling numbers in Reading had been necessary from 1996, and were completed in January 1998.

BT appointed EuroTel Bratislava as a distributor of Concert services in the Slovak Republic. EuroTel Bratislava now offered Concert Packet Services, in addition to the customer support it already provided to companies requiring international data services.

EuroTel Bratislava was a joint venture company involving Slovak Telecommunications and Atlantic West BV. BT chose the company because of its experience in the fields of international data and telecommunications services.

EuroTel Bratislava led the field in Slovakian telecommunications, offering a range of modern features. It had developed voice, data and video services for major local industry and public sectors, including banking and other financial institutions, transport and state administration. Among other services offered by EuroTel were virtual private networks, satellite communications, network management, and the supply of hardware products, including Nortel switching equipment based on ATM. EuroTel maintained business relationships with a number of world-leading telecommunications and IT companies, and provided access to 160 networks across the globe.

BT introduced further cuts to the cost of many overseas calls on 19th February, with some of the biggest reductions coming on calls to the most popular destinations, including key business routes. This meant that BT had reduced the cost of international calls by almost £170 million in just five months, following on from the introduction of the new International Weekend Rate introduced on 7th September and further reductions in October 1996.

Reductions covered calls to 33 countries, accounting for 60 per cent of all BT international calls, and included:

  • USA, Canada and Mexico (20 per cent of all calls).

  • Germany and France (20 per cent off daytime calls, with 10 per cent reductions to evening, night time and weekend prices).
  • Sweden (up to 37 per cent off calls).
  • Israel (up to 30 per cent off calls).
  • Many other European countries, including Eastern Europe (between 10 per cent and 20 per cent off calls).
  • Australia and New Zealand (10 per cent off all calls).
  • Nigeria (up to 20 per cent off calls).
  • India (10 per cent off calls to India during the week).
Altogether, customers were saved more than £1.5 billion between August 1997 and February this year. Savings had been enjoyed by all customers - residential and business.

By 19th February, BT had reduced the cost of calling the USA and Canada by more than 40 per cent since early September the previous year. The cost of calls to Australia and New Zealand had been cut by almost a third in the same period. Over five years, calls to North America had been reduced by more than 60 per cent.

BT introduced cuts of between 10 per cent and 28 per cent to the price of calls to South Africa, Hong Kong, Singapore and Malaysia from 17th July. This was the fourth time that BT had cut the cost of international calls and its sixth major price reduction - including UK calls - in less than a year. Over the previous year, BT had cut the cost of calls to every country in the world, some by as much as 44 per cent.

BT increased its stake in Airtel, the Spanish GSM mobile operator, to 15.8 per cent in March to become the second largest shareholder. It agreed to purchase the stake from Banco Santander which retained 5.5 per cent of the company.

By February 1999 BT's stake in Airtel, had risen to 17.8 per cent. The mobile communications company was Spain's second largest mobile network by this time, with more than two million customers.

At the same time, BT took full control of BT Telecomunicaciones S.A, its Spanish joint venture company, by purchasing Banco Santander's 50 per cent shareholding.

BT announced on 13th March that it had teamed up with a consortium comprising Singapore Technologies Telemedia, Singapore Power, and NTT of Japan, with a view to bidding for Singapore's second telecommunications licence, to be awarded in 1998.

The consortium was awarded both a fixed and a mobile telecommunication licence by the Singapore government on 23rd April 1998. Under the terms of the licence, the company would begin services on 1st April 2000. For the first time customers in Singapore would have a real choice in who provides services to their homes and businesses, including international direct dial services.

Hugh Laurie appeared in a series of four of BT's "It's Good to Talk" commercials broadcast from March. Kenny Dalglish appeared in a commercial in the Autumn, closely followed by Jeffrey Archer in November.

BT appointed Logic Telecom SA as a distributor of Concert services in Romania.

Logic Telecom, which joined 37 other Concert distributor partners, was to distribute Concert Packet Services in addition to providing customer support to companies requiring international data services. Logic Systems International Ltd. and Central European Telecom Investments had established the company in December 1995.

BT launched Wireplay, a nationwide dedicated computer games network which allowed players to compete with each other over the telephone network. Two or more people could play simultaneously in many of the most popular multi-player computer games.

One of the first multi media initiatives developed by BT, Wireplay allowed customers with a compatible game on their PC to access the system via a modem. Once logged on, the customer entered the Wireplay open forum and was able to challenge and play other players, or even join a league and play in teams.

First announced in September 1995, Wireplay was trialled from January 1996 by around 1500 people who were recruited to beta-test the system and the appeal of the service. The first fully compatible Wireplay game, a football game based on the Euro 96 tournament, was launched in June 1996.

Charges for Wireplay were on a 'pay as you play' basis comprising two rates, one for evening and weekends, the other for daytime, irrespective of where users were in the country. There was no additional joining fee or subscription charge.

Concert Communications launched a new offering, Concert Global Web Hosting Service, which speeded the flow of information over the Internet. It allowed businesses to host customer information on both sides of the Atlantic and brought the information closer to Internet users worldwide, speeding delivery time and easing network congestion.

The hosting service also provided powerful Intranet (private Internet) applications, enabling multinational businesses to distribute news and data more efficiently to employees worldwide.

The service utilised the worldwide managed Internet network that supported Concert Internet services. Concert Global Web Hosting was based on a single, globally distributed architecture as defined by Concert, which allowed consistent delivery of the same product set worldwide.

Concert Global Web Hosting was the first such service in the industry to offer a single point of contact for all technical support and customer service. Even with multiple web servers across the world, customers would gain efficiencies from having one point of contact and the convenience of a single bill in their local currency.

Initially, Concert Global Web Hosting included two products:

Concert Premium Hosting: offered customers a flexible web hosting solution on a shared server, with the ability to increase memory and bandwidth as the customer's web site grew.

Concert Custom Hosting: comprised a dedicated server to meet the demand for web sites with an extremely high volume of hits, or to assure the security of web sites that were integrated with corporate databases.

BT completed its acquisition of 26 per cent in Cegetel for £1.1 billion in cash plus the share capital of BT France in late September, having made its initial investment earlier in the year. The original agreement with Compagnie Generale des Eaux was signed in September 1996. BT was CGE's main strategic partner in Cegetel. Other partners included SBC, formerly South Western Bell, and Mannesmann, the major German group. CGE was later known as Vivendi.

Cegetel's principal asset was initially its 80 per cent holding in SFR, the number two mobile operator in France with more than 2.6 million customers in June 1998 (doubled since February 1997 and more than tripled since September 1996 when it had 700,000 customers). Vodafone had a 20 per cent stake in SFR.

The new group was well positioned to be the main competitor to France Telecom. It provided the full range of telecommunications services in France, with mobile through SFR, as well as fixed services and paging.

In 1997 Cegetel won a fixed infrastructure licence, a local loop operator licence and business and residential service provider licence, in addition to its existing mobile licence. Its fixed operation provided a wide range of data and voice services to both the business and the residential market, but mainly to business customers from 1st January 1998, following the introduction of market liberalisation.

It planned to have at least 20 optical fibre loops in place to service business customers by the end of 1998. Cegetel had already rolled out three loops in Paris by June 1998, and planned to target Lille, Lyon, Marseille and Strasbourg, connecting business customers to its national fibre optic backbone. (Cegetel had previously formed a joint venture company with SNCF, the French state railway, to build a 9,000 km fibre optic national backbone network). Concert would be an integral part of the new company's portfolio, giving Cegetel a significant advantage over all other competitors.

In June 1998 Cegetel announced that it had signed an agreement with America Online (AOL), Bertelsmann and Canal+ to create the country's leading provider of on-line Internet services.

Under the agreement, Cegetel and Canal+ took a majority stake in the new venture with 36.7 per cent and 18.3 per cent respectively and America Online, Inc and Bertelsmann had a combined stake of 45 per cent. The new venture brought together leading on-line providers, AOL France and CompuServe France, and had 285,000 customers.

BT was selected by PTA (Post and Telekom Austria) as its strategic global partner in March. PTA was to be the distributor in Austria for Concert Communications Services which by then had in all 44 distributorships worldwide. Shortly before, MDIS the former distributor of Concert services in Austria was merged into PTA's data communications division.

PTA had been a state-owned stock company since May 1996, although privatisation was planned. The company ran the Austrian telecommunications business as well as the postal and post-bus services. With around 54,000 employees, PTA's turnover in 1996 reached more than £3 billion. The telephone customer base had reached 3.9 million lines by the end of 1996, with most connected to digital network nodes. PTA's mobile phone company - Mobilkom Austria plc - served more than 600,000 customers.

At this time the Concert global network was available in about 750 cities in 49 countries worldwide, and interconnected with some 240 other networks which extended access to 1,300 cities in 130 countries.

PremierLine benefits were extended to include free membership of BT's Friends & Family Overseas discount package which gave a discount of 10 per cent on calls to five international numbers.

BT created 2,000 jobs in the north of England with the opening of two telemarketing centres, in Doncaster, South Yorkshire and on North Tyneside. Costing £15 million each, they opened in the autumn. Advisers employed at the sites tried to ensure that customers took full advantage of BT's products and services, including its range of pricing discount packages, thereby increasing sales.

Plans were announced to expand BT's existing telemarketing activities significantly in Glasgow.

Under a strategic agreement, between Portugal Telecom, BT and MCI, Portugal Telecom became the exclusive distributor for Concert Communications Services' voice products in Portugal, enabling it to offer the most advanced portfolio of global communications services to multinational businesses.

To reinforce the alliance, BT took one percent of the equity in Portugal Telecom during the next stage of the latter's privatisation in October. BT purchased 1.9 million shares for £49 million.

BT, British Sky Broadcasting Group, Midland Bank and Matsushita Electric announced on 7th May the formation of British Interactive Broadcasting Limited ("BiB"), an independent company created to deliver digital interactive services to TV viewers in the UK.

BiB was to be owned 32.5 per cent each by BSkyB and BT, 20 per cent by Midland Bank and 15 per cent by Matsushita Electric.

The shareholders agreed, subject to certain conditions, pro rata funding of £265 million to establish the technological infrastructure for these services and to provide subsidies on digital satellite set top boxes capable of receiving BiB's services. The subsidy would allow the boxes to retail at about £200. BiB was projected to be profitable after five years and would use its revenues to continue the development of its technology and the market for digital set top boxes.

BT's investment in this market was supported by the Government's announcement in April 1998 of its intention to lift the restrictions on national telecommunications companies providing broadcast services to homes over their networks from 2001. This was welcomed by BT, particularly the clarification that broadcast services delivered over the Internet would not be considered as breaching the restrictions then in force. Customers of the new multimedia services would thus reap the same benefits of competition as telecommunications customers. Such services were never envisaged when the original broadcast ban was introduced.

In May 1998, BT gave undertakings to meet the concerns of the European Commission (EC) in approving the formation of BiB. As part of the approval package proposed by BiB and its shareholders to meet the Commission's concerns, third parties would have access to the BiB-subsidised set-top boxes and the software needed to create and run interactive services.

Also within the approval package was a proposal from BT to divest itself of its broadband cable TV interests in Westminster and Milton Keynes. The EC considered that BT's control of the existing broadband delivery mechanism in these areas raised competition issues in the light of BT's participation in BiB.

BT agreed to this because BiB represented a major strategic thrust into interactive TV services. Its services would be available across the whole of the UK and were expected to stimulate the total multimedia market. By contrast, BT's cable interests were not core to the company's strategy in the UK.

Further reductions in call charges were introduced on 29th May and 1st October.

BT ran a "three minutes for the price of two" special offer on calls to Australia and New Zealand for its 20 million residential customers throughout July.

The Down Under Saver special offer - making every third minute free - applied to calls which were dialled direct from BT residential phone lines during the evening, night time and weekends. It did not apply to daytime calls or to any calls made from business lines.

Savings were credited automatically, and Down Under Saver calls highlighted on itemised bills. BT's discount schemes, which gave residential customers savings of up to 25 per cent on their calls, applied on top of the Down Under Saver special prices.

A six minute weekend call which would normally cost £2.39 cost just £1.59 during July - or as little as £1.19 with BT PremierLine and Friends & Family.

A six minute evening call came down from £2.52p to £1.68p, or just £1.26 with the discounts.

Down Under Saver followed BT's permanent reductions to the cost of calls to Australia and New Zealand which had brought prices down by almost a third in less than a year.

BT launched Ring Me Free, a personal free-call service for residential customers on 3rd July. Ring Me Free customers pay for incoming calls made by their chosen friends and relatives. Calls cost the same as if they had been dialled directly, plus a 10p set-up fee per call.

Customers could give their Ring Me Free details to whomever they chose. That other person could then call them at their home whenever they wanted to talk and not have to worry about the cost.

Customers with discount schemes such as Friends & Family and PremierLine secured the appropriate savings on all the Ring Me Free calls which they received, and on the 10p set-up fee.

Ring Me Free customers were provided with their own personal 12 digit code which they could give to those friends and relations from whom they welcomed a call.

Callers first dial a five-digit access code followed by the personal code: they did not need to dial the Ring Me Free customer's normal phone number, and they paid nothing for the call.

Ring Me Free could be used from any BT tone-dialling phone in a home or office. It did not work from BT public payphones, from mobile phones, or from outside the UK. Calls could not be made from other licensed operators' networks.

BT customers registered for Ring Me Free by dialling, free, on 0800 102 800.

BT introduced a new, simpler pricing structure for Chargecard calls made with its Chargecard from 7th August. There was now a single 20p-a-minute rate for all inland direct dialled calls, regardless of time of day and distance.

The new Labour Government announced a "Windfall Tax" on the profits of privatised companies in July. The tax levied against BT amounted to £510 million. BT announced that it was disappointed in having to be disadvantaged in this way, but that it had ruled out a legal action to challenge the validity of the action.

The new Labour Government relinquished in July its Special Share ("Golden Share"), retained at the time of the flotation, which had effectively given it the power to block a takeover of the company, and to appoint two non-executive directors to the Board.

This was the final step for BT in removing the traces of formal Government control after thirteen years in the private sector.

Exchange line rentals were increased on 1st July. The new rentals were £26.62 per quarter for residential customers and £42.12 (£35.84 exc. VAT) for businesses. The rental changes amounted to an increase of about 1p a day, meaning bill increases of no more than the existing 2.4 per cent rate of inflation for almost all customers.

Overall, including the new rentals, the average residential bill had fallen by 3.22 per cent and the average business bill was down by 5.53 per cent since rentals last changed in July 1996.

As a result of repeated reductions, prices had fallen by more than £840 million in the year to March 31st 1997 and BT had saved customers about £2 billion in less than four years. Savings benefited both business and residential customers.

Since September 1993, the average residential bill had been brought down by more than 17 per cent in real terms and the average business bill had fallen by 27 per cent.

BT remained committed to keeping price changes for residential customers to 4.5 per cent below inflation each year until 2001. As a result, overall bills would continue to fall.

Line rentals for business customers rose again from 1st August 1998 and for residential customers from 1st November 1998.

BT ran another special offer, Weekend Saver, for residential customers which cut the cost of UK calls during September. Long distance calls made from residential lines on every Saturday and Sunday in September cost just 1p a minute, the same as local calls. This was a 69 per cent reduction from the normal 3.3p a minute.

As with previous offers, BT's discount schemes gave further savings on top of Weekend Saver.

BT also ran a special offer for businesses during September. With the September Saver every local and long distance UK call made on business lines during the working day, between 8am and 6pm, Mondays to Fridays, received a 10 per cent discount on the normal price.

The various BT discount schemes for businesses gave further savings on top of September Saver.

Customers did not need to do anything to benefit from either Weekend Saver or September Saver. Savings were credited automatically, and shown on itemised bills

BT introduced a new, simpler, tariff for calls made from its public payphones.

From 18th September, there were just two rates for all UK calls, local and long distance, and a single rate for calls to many international destinations.

The 10p minimum fee remained unchanged.

For each 10p unit, customers received 67 seconds of time for local calls, and 43 seconds for longer distance regional and national UK calls, at all times.

Simplification of BT payphones' international call prices also reduced charges on many routes, some by 50 per cent. From 18 September, there were also changes to the cost of credit and debit card calls made from BT payphones. All local calls were charged at 10p a minute with regional and national calls costing 20p a minute. The minimum charge remained at 50p.

BT daytime rate applied from 8am to 6pm, Monday to Friday; evening and night-time was from 6pm to 8am, Monday to Friday; weekend rate was from midnight Friday to midnight Sunday.

Regional calls were non-local calls of up to approximately 35 miles; national calls were over about 35 miles.

Cellnet Genie was launched, one of the UK's most comprehensive free information services on the Internet. The Genie website brought together the latest information on news and current affairs, sport, finance, entertainment, travel and careers on one web site. Customers accessing the site could ask for information to be delivered to their mobile phone via text messages or to an e-maill address.

Both business and residential customers could take advantage of another BT promotion by having a second phone line installed for half the usual price from 1st October to 31st December.

The special offer applied to the second line provided at the same address. During this period customers could have a second line installed for just £58.16 instead of £116.33 (£49.50 instead of £99 excluding VAT).

The special offer would cut the cost of phone connections for companies which were looking to expand and to improve their service to customers. BT estimated that nearly one in every four calls to businesses did not get through, often because someone was already on the phone. A second line could turn failed calls into successful sales. For families, a second line meant that other members could have access to their own phone.

The offer did not include ISDN lines.

BT introduced its first ever electronic payment option on 18th September for residential customers - the BT Payment Card. The card was designed for use with the new national bill payment network, PayPoint, which was also launched earlier this month.

The BT Payment Card allowed customers to pay money towards their bills in corner shops, filling stations, newsagents and a host of other local outlets as well as through most post offices and BT shops. The card was swiped through a terminal and the amount paid towards the bill registered. A receipt confirmed the amount.

BT sent application forms to millions of customers over the following months, on a region by region basis. A successful trial of the BT Payment Card and the PayPoint network was run in Northern Ireland the previous year.

The card was particularly targeted at the UK's four million households, out of a total of 23 million, that only used cash to pay their phone bills, as well as for those without a bank account.

Customers who applied for a BT Payment Card were eligible for a one-off discount equivalent to 120 minutes of local weekend calls if they clocked up five PayPoint transactions and pay a minimum of £25 in two months.

Concert Communications Services launched Remote Internet Access on 18th September. This new service provided remote users and business travellers with secure global access to the Internet, and Internet-connected LANs and Intranets, at intra-country rates.

It offered significant savings and eliminated the need for expensive international calls to access domestic networks remotely.

Remote Internet Access was available initially via more than 800 points-of-presence in 50 countries. It represented a versatile global value-added service for Internet service providers and multinational customers, who wanted to extend their network capabilities internationally without investing in additional infrastructure.

In conjunction with Concert Internetplus Service, launched in June 1996, it allowed remote offices and mobile workers to connect to their corporate networks via the Internet or simply to access information from the World Wide Web.

This new service was the latest addition to the Concert Remote Access Service portfolio. It was a no-risk and easy-to-use global access solution which provided the same dial-up access for users who were away from their base. Remote Internet Access had a consistent look and feel from any dial-in location and required no capital or network management oversight by the user.

BT introduced a new European compliant version of ISDN 2, its high speed digital communications service, from 13th October. ISDN 2e became BT's standard offering for all new provision of ISDN 2 'basic rate' lines. ISDN 2e interworked with BT's existing ISDN 2 service for both voice and data calls. Customers of ISDN 2 would continue to be supported for as long as they wanted the service.

ISDN 2e complied with the latest European standard and was designed to encourage further the introduction of low cost European customer premises equipment into the UK. New features of ISDN 2e available at launch included a multiple subscriber numbering option (MSN), allowing customers to choose from two, three, eight or ten numbers on each line and a new BT-assisted call forwarding facility for both voice and data calls.

The ISDN 2 and ISDN 2e services were fully compatible for voice and data calls: both offered a digital line comprising two 64Kbps channels into customer premises and supported many applications including file transfer and video conferencing as well as Internet access and voice calls. In fact, both complied with international standard 1420, but ISDN 2 was introduced before the completion of the latest European ISDN standards. As a result, small technical differences existed between the two, which was removed by the introduction of ISDN 2e.

Future planned developments for ISDN 2e included call waiting for four calls at a time, call hold, customer control of call forwarding and call deflection - a service by which calls could be forwarded depending on their calling line identities.

Initially, there was little difference between the two services and the ISDN2 continued to represent value for money. Customers who wished to upgrade, however, were able to do so at a cost of £80 per connection. This charge contributed towards the actual cost of upgrading the customer's line.

ISDN 2e and ISDN 2 were priced in the same way with the same options: Start Up, Fast Start, Low Start, Call Plan and Call Plan Plus.

BT announced on 10th November 1997 its intention to sell its stake in MCI to the US company Worldcom for $7 billion. This followed Worldcom's successful rival bid for MCI on 1 October. Worldcom's offer, which was followed on 15 October by an unsuccessful counter bid from GTE, America's largest US based local telecommunications company, was made after BT and MCI had renegotiated the terms of the planned merger following a profits warning from MCI in July 1997.

BT proceeded to sell its holding to Worldcom in September 1998 on the completion of the latter's deal with MCI, and then purchased from MCI immediately afterwards its 24.9 per cent holding in Concert Communications Services for £607 million, thereby becoming sole owner.

BT announced in November that it planned to license its trademark Gilbert Scott K6 payphone kiosk for use by competitors. The move was to promote competition where planning requirements by local authorities prevented other operators siting their modern kiosks. Licences were issued on condition that the operators used a colour other than red, and that it was evident that an operator other than BT was providing the service.

BT was previously reluctant to allow use of the K6 design by other operators because of its strong association with the company and because the kiosk provided restricted access for customers with disabilities.

Following a dispute with a competitor in 1996, BT introduced a policy of site swapping. If another provider wished to install payphones in areas where local planning authorities insisted on the K6 design, BT offered the other operator one of its nearby existing non-K6 sites instead. The first site swapping agreement was established between BT and New World Payphones in October 1996.

However, because of the continued insistence by a few local authorities that only the K6 could be used in designated areas, and the failure of the policy of site swapping agreements to open up these areas to competition, BT decided to grant licences to help promote customer choice.

BT and the Republic of Ireland company Electricity Supply Board (ESB) announced on 9th December that they had reached agreement in principle to form a joint venture to offer communications services in Ireland, Western Europe's fastest growing economy.

The new company would be a 50-50 joint venture between BT and ESBI Telecoms, ESB's telecommunications investment unit. Investment by the alliance would be approximately £75 million in the first five years, growing to £130 million over ten years, and it was expected that the company would have more than 300 personnel.

The joint venture would immediately have access to ESB's digital microwave network and would use the company's overhead electricity cables and ducts to expand the network. This network, one of the most extensive in the country, would be linked to the BT system.

Headquartered in Dublin, the company planned to offer a range of communications products and services to Ireland's business community.

Calls made on Christmas Day, Boxing Day and New Year's Day - including local, regional, national and international calls made by residential customers or businesses - were charged at the cheaper evening and night time rate, whatever time they were made.


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


The UK telex service was discontinued.



For information from 1998 onwards please visit the BT Archives.

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