BT to spend dollars 1bn on network

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BT IS investing up to dollars 1bn ( pounds 529m) to build a worldwide network for voice, video and data communications, write Mary Fagan and Russell Hotten. The project is part of BT's plan to capture the telecommunications business of multinational corporations whose sites and customers are geographically dispersed.

The network, on which BT refused to comment, would involve the installation of dozens of massive switching centres in strategic locations. It is understood that the company will begin by installing centres in London, New York, Sydney and Frankfurt with a view to completing the network early next century.

BT already has a unit called Syncordia that manages international communications for large companies using existing links. Syncordia would be able to take advantage of the global network project, codenamed 'Cyclone'.

BT is expected to offer private network services undercutting prices charged on public telephone networks by up to 15 per cent. But the company will meet competition from other telecommunications giants such as AT&T of the US and KDD of Japan. It will also face regulatory barriers as most countries are less liberal than the UK in allowing foreign telecommunications operators to operate within their territories.

There is speculation that BT would link up with a long-distance carrier in the US such as MCI.

GPT, the telecommunications equipment maker, is to shed 300 jobs in Britain, bringing the total lost at GPT over the past year to 2,500.