Concert ends – no applause
BT and AT&T today announced the death of Concert, their heavily loss-making joint venture targeting international business.
It's a drawn-out demise - customers will be wound back to the constituent companies sometime in the first half of next year.
BT will write down the alleged value of Concert et al by £1.2bn, and will take a charge of £200m to cover redundancies and sundry obligations - 800 in the UK alone.
In toto, 2,300 jobs are lost.
The bits that used to belong to BT - customers, staff, etc, kit etc. - will return to BT and AT&T will reclaim its assets. BT will also withdraw from its Canadian JV with AT&T, releasing it from working capital commitments and a promise to stump up CAN$725m for shares in the company.
BT also get $400m from AT&T to reflect the allocation from resources, and expects to receive $370m in fees from AT&T over the next couple of years.
The demise of Concert will save BT a heap of money,
but effectively marks the end of its global ambitions. For now. Concert is expected to generate $800m in
operating losses in calendar 2001. Apparently, the losses fall more heavily on the BT side of Concert, but we're not sure how that squares with BT's estimated EBITDA loss of around $200m in calendar 2001.
The company plans a re-org to take the business back into profit at the EBITDA (earnings before interest tax, depreciation and amortisation) in calendar 2003.®