Analysis: BT's lonely future

The BT management team's empire has shrunk dramatically

As BT confirms the end of its failed joint venture with AT&T, BBC economics reporter John Moylan assesses the prospects for the former UK telecoms monopoly.

Sir Peter Bonfield always looked like a man who would launch British Telecom onto the global telecoms stage.

His international experience marked him out - he had spent years in the United States with Texas Instruments and then as the UK head of Japanese owned ICL.

So few were surprised when the company announced plans to merge with America's MCI. In the end BT lost out in the high stake bidding war which saw MCI being snapped up by Worldcom.

Undeterred BT was soon exploring other international options - and in 1998 the Concert joint venture with AT&T was born.

Whose problem is it anyway

Concert would provide a one stop shop telephony service to multinational companies.

Analyst believed a full scale merger between the two telecoms giants was on the cards.

Three years later, Concert is being shut down.

Tough and growing competition from rivals with lower cost bases had destroyed the Concert business plan... the venture was haemorrhaging cash.

Analysts claim the 50/50 ownership structure meant that no-one took ownership of the problems either.

Global retrenchment

And the move is another retrenchment from BT's global plans.

Over the past year BT has been shedding its non core assets - not least a series of investments in mobile ventures in Asia.

The move was part of BT's plans to pay off huge debts run up buying licences for third generation mobile networks.

Now BT is embarking on its biggest shake-up since privatisation.

Next week shareholders are expected to approve plans for the company to spin off its wireless business - creating two new companies.

Both will concentrate on the UK and European markets. Long suffering shareholders - who have seen their stakes in the company collapse from close to £14 to approach a four-year low - will get shares in both.

They could yet benefit from the fact that both demerged companies could become take-over targets.

It's an outcome that Sir Peter could hardly have imagined five years ago, when he set out to turn BT into a global player.

Despite the setbacks, he insists that he will stick to his plan to remain at the helm until his contract ends next year.