BT may shift money into global networks

The telecoms giant is well placed to become a service provider, says Charles Arthur

BT IS understood to be examining opportunities for investment in pan-European and even global information networks, putting it in line to compete with US telecom operators. Sources within BT say that it might invest in subsidiaries of the so-called World Wide Joint Venture set up this month by News Corporation and MCI (in which it has a 20 per cent stake). Or it could move ahead on its own.

Industry observers say that BT is well placed to use its commercial clout to break into the burgeoning markets, especially as a "service provider" - providing the software through which customers can use computers to access on-line shopping, or download films to watch at home, for example.

"BT brings an awful lot to any negotiating table, whoever it is talking to," says Bryan Van Dussen, principal European research analyst at Yankee Group, the consultancy company. "And it's doing an awful lot already."

It is not thought that BT would want to buy into "content" companies, such as film studios, television programme makers or computer games producers. It would, however, like to play an intermediary role. There is a close analogy with a shopping mall operator: it would own the shops, but would not provide the products. CompuServe, the global on-line service owned by H&R Block in the United States, is an example. It is believed to generate revenues of more than $1m each day, and its subscriber base increases exponentially. Its principal rivals in the US are American OnLine and Prodigy - the latter jointly owned by IBM and Sears. But in Europe, CompuServe has little competition.

The advantage of being a service provider is that one can charge twice over: the subscribers pay for access to data on the service and companies pay for space in the "mall" to sell to subscribers. The service provider's main cost is capital, to buy computer equipment, and the running costs are comparatively low.

This is widely seen as the reasoning behind Microsoft's decision to set up the Microsoft Network. The company's new computer operating system, Windows 95, will include software allowing simple access to the Microsoft Network. This is likely to trigger a bloody battle with the other on-line services: many in the industry believe automatic access to the Microsoft Network will give Bill Gates's company a huge and possibly unfair advantage.

The Internet, the worldwide information and communication network that can be accessed by anyone with a computer and a phone line, is also seen as fertile ground. "BT is definitely going for a place on the Internet," says Eddie Hold, editor of Communicate! magazine, which follows the industry. "I would be very surprised if they don't follow MCI by offering some sort of virtual shopfront. BT took a long time to get into the Internet - in the UK, companies like Pipex [owned by Unipalm] got a couple of years' lead on them. But BT is a safer bet than smaller companies."

BT would benefit from its strength as a brand, says Mr Van Dussen. "I've talked to BT people on its video-on-demand trial [near Martlesham in Suffolk] and there's this feeling that the way the tide of business is going, you just have to be a service provider. It's not good enough to just offer telecoms. You have to buy the rights to Hollywood films or some local TV or films and be able to offer those."

Not every large telecoms company is following this path, though. AT&T, the US long-distance telecoms provider, has determined to apply itself to providing phone services only. "That's not enough for BT," says Mr Hold. "BT wants to be everywhere."

Start your day with The Independent, sign up for daily news emails
News
Ben Little, right, is a Labour supporter while Jonathan Rogers supports the Green Party
general election 2015
News
The 91st Hakone Ekiden Qualifier at Showa Kinen Park, Tokyo, 2014
news
Life and Style
Former helicopter pilot Major Tim Peake will become the first UK astronaut in space for over 20 years
food + drinkNothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
News
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Sport
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
football
Life and Style
health
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
Life and Style
Buyers of secondhand cars are searching out shades last seen in cop show ‘The Sweeney’
motoringFlares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own