British Telecommunications

BT bought a 20% stake in MCI in 1993. In November of 1996, BT attempted to consummate the relationship with a $24 billion bid for the 80% of MCI it did not own. This bid was reduced to $19 billion in July of 1997 when MCI revealed large losses in the U.S. local telephone market.

When the BT-MCI union was first proposed, it was suggested by many analysts that while BT might be a touch staid and slow-moving, MCI, as the maverick among phone companies, was just the ingredient to add zest to the BT culture primarily because of its innovative marketing experience, learned while taking on AT&T.

In the first two weeks of October 1997 this proposition appears to have been stood on its head. In the US context, the new Worldcom Inc.'s unsolicited $30 billion takeover bid for MCI makes MCI seem slightly old and tired, and sufficiently shaken by the pace of change to have sought some refuge in BTs embrace.

But the consequences of the WorldCom takeover bid for MCI is equally momentous for BT. BT management, assuming that the MCI union was a done deal, had formulated a general marketing strategy that included three new ingredients: a focus on the European marketplace, seeing itself as well-positioned

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es cheaper telephone bills as a major selling point. The number of homes with cable provided telephone series has grown from around 280,000 three years ago to more than 2.2 million. Business lines via cable during the same period have risen from 34,653 three years ago to 239,000 by April of 1997. And as was previously mentioned average growth in new customers for cable telephone runs at over 70,000 each month. If all the homes that could take cable did, BT would lose at least another six million customers (Snoddy, 1997). Ed Carter has been instrumental in refining BT's use of its customer information. He has created models for mining databases and targeting specific groups. In conjunction with such activity BT is also putting more money into telemarketing activities. These telemarketing centers are staffed by operators who call residential customers at home to promote BT products and services such as "Friends and Family." BT presently operates two such centers and in mid-April of 1997 BT announced that it was constructing two additional ones, each employing 1,000 people, all working about 25 hours a week. Half of the operators would be staffed by agencies and the rest would be BT employees. This arrangement would suppos
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Approximate Word count = 6119
Approximate Pages = 24 (250 words per page)

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