Concert split will cost BT £1.2bn
British Telecom and AT&T announced their new global strategies following the long-anticipated demise of their joint venture, Concert. The companies will take a higher-than-expected charge of $7bn (£4.8bn) for the break up of Concert. BT's share of that charge amounts to £1.2bn.
The Financial Times reports that BT expects to merge its share of Concert's business into its European business services arm, Ignite, while AT&T intends to build an international business on Concert's remains. The Daily Telegraph reports that up to 1,000 of Concert's UK workforce could be made redundant. The remaining 1,300 will be merged into Ignite. The Independent reports that analysts see the move as further evidence of BT's intention to restructure. The Guardian suggests that the break-up of Concert is proof that BT has relinquished its claims to be a global communications player.
Vodafone to axe 600 UK jobs
The mobile operator, Vodafone, has announced that it is to concentrate on gaining more revenue from existing users and controlling costs. One result of the cost cutting will be the loss of 600 jobs in the UK.
The Guardian reports that the job cuts are likely to affect all levels of the business, with the senior management team being reduced by 10%. The Daily Telegraph reports that the news comes ahead of a High Court ruling on whether the government's granting of a 180-day extension to Orange and Vodafone for the payment of their 3G licence fees was unfair. The Financial Times reports analysts' expectations that the company's group capital expenditure will be reduced to £4.5bn this year.
US recession the worst since 1945
Official figures have confirmed that the US is going through its worst industrial recession since the Second World War.
Most of the papers concentrate on the effects of the US recession on its manufacturing sectors. However, the Financial Times and The Guardian both report that Intel and IBM had both hit their quarterly targets, despite Intel disclosing a 77% tumble in profits. IBM's net income fell by 20% in the third quarter. The Financial Times also reports a 15% drop in sales of e-commerce companies. The worst-hit companies have been travel sites, although established companies such as Amazon and eBay have also suffered a decline in activity.
Best of the rest
The Financial Times reports
- I2, the supply chain software company, reported a net loss for the third quarter of $5.5bn, and announced 1,000 job cuts.
- The embattled software security company, Baltimore Technologies, is encountering opposition from institutional shareholders to its new chairman's plans to offer non-executive directors a share option scheme.
The Times reports
- The telecoms group, Marconi, will learn today whether the sale of its medical systems division will be approved by the European Commission.
- The software and services group, Morse, blamed a fall in its quarterly sales figures on the 11 September terrorist attacks. The company's net cash position has improved, but sales for the third quarter fell by 26.5% to £111m.