AT&T said it would take a $5.3bn (£3.7bn) charge against its third-quarter earnings, largely as a result of the demerger agreement. BT will take a £1.2bn charge against its third-quarter earnings, and also plans to divest its stake in AT&T's Canadian subsidiary.
Up to 2,300 jobs will be lost as a result of the demerger, the companies said. The remainder of the 6,300-strong Concert workforce is expected to be absorbed into BT and AT&T.
AT&T cited overcapacity and a sharp drop in telecoms prices that dragged down revenue as reasons for the decision to disband the venture. Concert was not helped by the fact that many emerging carriers, who had been expected to become customers and suppliers, had encountered financial difficulties.
The demerger agreement is expected to close in the first half of 2002, and AT&T and BT will work together to provide a smooth transition for Concert customers. All existing contracts and service level agreements will be honoured for three years, according to a joint statement.
Under the terms of the agreement, BT and AT&T will re-assume control of the assets each had contributed to the joint venture, including customer contracts, international transport facilities and gateways. The exception to this agreement is a frame relay network in Asia-Pacific, originally contributed to Concert by BT, which AT&T will take over.