Looking back through the history of telecommunications in the UK, it is interesting to see not only the advancements to the technology and services available, but also the way that the providers of those services has changed. In this post, I am going to look at how the provision of telecommunications services has progressed from the original small local companies, via the state-owned majority that lasted most of the 20th century to the current free-market model of today.
Early years
Telephony in the UK and be traced back to the late 1870s and the invention of the telephone. In the early years, services were provided by a multitude of companies until consolidation took place. Three of those early companies are prominent in the history of UK telephony.
The history of the “General Post Office” (GPO) can be traced all the way back to 1660, when it was established by King Charles II as the postal system of the Kingdom of England. The GPO was formed as a state monopoly covering the dispatch of items from a specific sender to a specific receiver. At the time of its formation, this dispatch covered physical letters and packages, but as new forms of communication came into existence in the 19th and early 20th centuries, the GPO claimed monopoly rights on the basis that like the postal service they involved delivery from a sender and to a receiver. Through The Telegraph Acts 1868 and 1869, the Postmaster General was granted the right to acquire inland telegraph companies in the United Kingdom conferred a monopoly in telegraphic communication in the UK. The GPO started its telephone business in 1878 with competition from various independently run networks.
“The Telephone Company (Bells Patents) Ltd” was also founded in 1878 and in August 1879, they opened Britain’s first telephone exchange at 36 Coleman Street in London. This original exchange served just 8 subscribers. This was followed later in the year by two more exchanges in London and then exchanges in Glasgow, Manchester, Liverpool, Sheffield, Edinburgh, Birmingham and Bristol.
In September 1879, “The Edison Telephone Company of London Ltd” was founded and in 1880, merged with “The Telephone Company” to form “United Telephone Company” (UTC). In 1881, the “National Telephone Company” (NTC) was formed as a provincial subsidiary of “UTC” to operate telephone services in Yorkshire, Nottinghamshire, Ulster and parts of Scotland. Between 1881 and 1885, “UTC” formed similar provincial companies throughout the British Isles.
In December 1880, the Postmaster General obtained a court judgement that telephone conversations were, technically, within the remit of the Telegraph Act and the GPO then licensed all existing telephone networks.
In 1889, having been refused permission by the Government to transfer all the licenses held by its provincial companies to a new company, UTC began a process of amalgamation with all the licences eventually being held by “NTC”. In 1911, as part of an option that the Post Office had from the original licence agreement in 1881, the General Post Office (GPO) purchased NTC’s system and NTC went into liquidation.
Privatisation and the end of the monopoly
From 1911 until the early 1980s, telecommunication services in the UK were almost entirely provided by the GPO as a state-owned monopoly, with only Kingston upon Hull continuing to operate an independent municipal telephone company after all the others had been gradually absorbed into the GPO. During this period, the state-owned monopoly underwent a series of name changes.
In 1969, the GPO changed from a government department to a separate nationalised industry and was renamed as the Post Office and Post Office Telecommunications was one of its divisions.
In 1980, the British Telecom brand was introduced and on 1 October 1981, it became the official name of Post Office Telecommunications, which became a state-owned corporation independent of the Post.
In 1982 BT’s monopoly on telecommunications was broken with the granting of a licence to Mercury Communications and the government of the time announced its intention to sell shares in British Telecom to the public. In August 1984, the transfer of British Telecom’s business, property, rights and liabilities to the new public limited company (plc) British Telecommunications plc took place. Initially, the plc was wholly owned by the Government, but in November 1984, 50.2% of the new company was offered for sale to the public and employees. This was followed in December 1991 and July 1993 by the sale of the remainder of the Government’s interest in the company. Additionally, in April 1991, the company changed its trading name to “BT”.
Since the granting of a licence to Mercury Communications in 1982, the UK telecommunications industry has seen a rapid growth in the number of companies providing telephone services in the UK. However, BT is still the main provider of fixed telephones lines and it and Kingston Communications (the now privatised municipal company in Kingston upon Hull) are the only providers that have a universal service obligation to provide a fixed telephone line to any address in the UK. BT also has an obligation to provide public call boxes, although with the vast majority of the population now having mobile/smart phones, one wonders how much longer that obligation will remain.