Marconi pleads with Hewitt to intervene after £10bn BT snub

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The Independent Online

Marconi, the troubled telecoms supplier, will ask Patricia Hewitt, the Secretary of State for Trade and Industry, to intervene in a desperate attempt to win part of a £10bn supply deal with BT.

Marconi, the troubled telecoms supplier, will ask Patricia Hewitt, the Secretary of State for Trade and Industry, to intervene in a desperate attempt to win part of a £10bn supply deal with BT.

BT announced on Thursday that Marconi would not be a supplier for its 21st Century Network (21CN) project, which will upgrade BT's telecommunications infrastructure to internet-based technology. Instead, BT selected eight foreign suppliers.

Its failure to win any of the work has cast doubt on the future of Marconi. A company spokesman confirmed that as many as 2,000 of its 4,500 UK employees could lose their jobs.

Marconi, and City analysts, had expected it to win at least £500m in work from BT over five years as part of 21CN. BT is Marconi's largest customer and accounts for about 27 per cent of its revenues.

A senior Marconi source confirmed it had approached the Department of Trade and Industry to see if it would try to change BT's decision.

"We would hope they would have a word with BT and assist us to get back in there," the source said. "In other European countries, this wouldn't happen. They always favour the local vendor."

It is understood that BT told Ms Hewitt of its decision not to award Marconi any business before it told Marconi, and that the Trade Secretary chose not to intervene. However, with 2,000 jobs on the line, mostly in Coventry, where Labour has three MPs, she will come under pressure to change her stance.

Marconi has the support of the unions, which condemned BT's decision.

Peter Skyte, a national officer for Amicus, said BT had a responsibility to the UK industry. "Amicus is going to kick everything that moves in order to persuade BT to rethink its approach."

A DTI spokeswoman would not say whether it was in discussions with Marconi, but said that BT's move was a "commercial decision".

BT said it would not consider changing the suppliers for 21CN. A spokesman said it would resist any government pressure to do so.

The eight companies awarded the contracts would use an estimated 5,000 workers also based in the UK to carry out the work, he said.

A Labour Party spokesman would not give any specifics on what the Government might do for Marconi and its employees.

The Liberal Democrat trade and industry spokesman, Malcolm Bruce, said the Government did not have a proper set of criteria for this type of situation.

"It's a bit arbitrary what calculations are being made and why," he said. "It just means the politically sensitive cases get the attention."

"We need a level playing field and an established set of criteria to cope with structural change," Mr Bruce added.

Another source close to Marconi admitted that losing out to larger rivals for the BT project would make it fall even further behind and would affect customer confidence in the company.

Marconi had a turnover of £1.37bn last year. Its Swedish rival Ericsson, one of BT's preferred suppliers for the project, had a turnover of £9.6bn.

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