BT's 21CN Network / The end of Marconi

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SamTheMan
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This was not as publicised as Rover's bankruptcy but it marked the end of one of the most important British companies that had a global presence.

BT has planned a 21st Century Network project and named its vendors. Marconi had always been the favoured, historical, supplier until it chose Alcatel instead. Marconi's shares plummeted by 40%. It's now selling its assets to the Swedish company, Ericsson.

http://news.bbc.co.uk/1/hi/business/4375106.stm
http://www.theregister.co.uk/2005/04/28/marconi_21cn/

Why are we seeing so many British icons fading? It's sad. In the meantime, foreign companies like Cisco and Alcatel are rubbing their hands with glee as this will be their biggest project yet. Isn't it a shame there isn't a tiny bit more economic nationalism? I'm not talking about the ridiculous form it takes in some countries but compared to other European countries, the UK gets rid of companies like a pair of old socks.
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JonD
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Marconi said they couldn't meet the commercial requirements.

(Original post by Le Reg commenting on BT's plan)
21CN is a key infrastructure that will fuel the UK economy and provide a flexible way for consumers to use new services. The selection of the preferred suppliers is an incredibly important building block towards that vision. 21CN will also radically reduce BT's cost base, with identified savings of around one billion pounds a year.
As a customer, I'd rather not get a shortfalling second-best simply for the sake of national pride misplaced national pride stemming from the fetishism of brand names and historic nostalgia.

Secondly, are we really seeing so many national icons fading? How many others than Rover and Marconi can you name (both have a shaky history because of nationalisation), and have you considered objectively balancing them with our successes? What about considering our overseas assets (with all our investment, we surely own half of China)? Our economy is growing more than Swedens (and every other developed european country), so I guess we're doing alright.
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Bismarck
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(Original post by SamTheMan)
Why are we seeing so many British icons fading? It's sad. In the meantime, foreign companies like Cisco and Alcatel are rubbing their hands with glee as this will be their biggest project yet. Isn't it a shame there isn't a tiny bit more economic nationalism? I'm not talking about the ridiculous form it takes in some countries but compared to other European countries, the UK gets rid of companies like a pair of old socks.
Would you prefer to have a low unemployment rate and high growth rate or would you prefer to have national champions? Because the two goals are mutually exclusive in an economy of Britain's size.
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SamTheMan
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I'm not saying what I prefer but I think you'll find it difficult to find other countries with so little economic nationalism. The French have been reproached for their economic nationalism (they're going to put in place special rules for IPOs/takeovers when French companies have been making the most IPOs in the EU).
In Germany, Vodafone bought D2 which was the number-one mobile phone operator. After a couple of years, D2 was overtaken by a not so well run, not so global (at the time), T-Mobile, simply because it was German.

Just pointing out that a historic company would never have ended up like that in another country. It's all nice to say we shouldn't have "misplaced economic nationalism" which is all nice and true but we're the only ones with that attitude.
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(Original post by JonD)
Our economy is growing more than Swedens (and every other developed european country), so I guess we're doing alright.
Um the latest figures from a week ago:

GDP growth Q2 2004 - Q2 2005
Britain: 1.5%
France: 1.3%
Germany: 0.6%
Sweden: 2.3%
Spain: 3.4%
Austria: 2.1%

Forecasts for 2005 and 2006:
Britain: 1.9% and 2.1%
Sweden: 2.3% and 2.7%

I think you're thinking of figures from years ago. The economic dream based on speculation on house prices and consumer spending is over.
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Bismarck
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(Original post by SamTheMan)
I'm not saying what I prefer but I think you'll find it difficult to find other countries with so little economic nationalism. The French have been reproached for their economic nationalism (they're going to put in place special rules for IPOs/takeovers when French companies have been making the most IPOs in the EU).
In Germany, Vodafone bought D2 which was the number-one mobile phone operator. After a couple of years, D2 was overtaken by a not so well run, not so global (at the time), T-Mobile, simply because it was German.

Just pointing out that a historic company would never have ended up like that in another country. It's all nice to say we shouldn't have "misplaced economic nationalism" which is all nice and true but we're the only ones with that attitude.
So because others hold a view that is screwing their economies, Britain should follow suit?
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SamTheMan
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(Original post by Bismarck)
So because others hold a view that is screwing their economies, Britain should follow suit?
Yes you have a point. I'm only pointing out that few countries are the same.
In the case of the US, it's difficult for foreign companies to do IPOs, yet most people there are convinced this is good for the US economy.
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Bismarck
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(Original post by SamTheMan)
Yes you have a point. I'm only pointing out that few countries are the same.
In the case of the US, it's difficult for foreign companies to do IPOs, yet most people there are convinced this is good for the US economy.
And yet when someone buys a major American firm (Chrysler comes to mind), as long as it's not the Chinese, no one blinks. What IPOs has to do with national champions is beyond me.
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SamTheMan
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(Original post by Bismarck)
And yet when someone buys a major American firm (Chrysler comes to mind), as long as it's not the Chinese, no one blinks. What IPOs has to do with national champions is beyond me.
But Daimler's cash offer was too good to resist for a company in such deep **** as Chrysler, no matter where Daimler has its headquarters.
I think you'll find that successful takeovers by foreign companies are very rare in the case of the US. But as you said, there's mostly been news about attempted IPOs by Chinese firms recently... Maybe it is a matter of just Chinese companies.

Originally Huawei, the Cisco of the future, was to takeover Marconi...
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JonD
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(Original post by SamTheMan)
Um the latest figures from a week ago:

GDP growth Q2 2004 - Q2 2005
Britain: 1.5%
France: 1.3%
Germany: 0.6%
Sweden: 2.3%
Spain: 3.4%
Austria: 2.1%

Forecasts for 2005 and 2006:
Britain: 1.9% and 2.1%
Sweden: 2.3% and 2.7%

I think you're thinking of figures from years ago. The economic dream based on speculation on house prices and consumer spending is over.
So are you saying that we would be richer if our houses were all temples to British brandnames?
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SamTheMan
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(Original post by JonD)
So are you saying that we would be richer if our houses were all temples to British brandnames?
I don't know... would it be that surprising? Surely there are benefits to having at least one British car manufacturer, one big British network equipment manufacturer...

As for the British economy, as you can see, things aren't too peachy. With manufacturing in recession? Plus comparing us to Sweden is a bad idea. Britain likes to present itself as an alternative to the continental social model but the Scandinavians have had similar growth, increased productivity (while ours is plummeting), and have one of the most solid social models in Europe.If there's one model to follow it's the Scandinavian one, despite its flaws.

The British economy is not based on a solid basis in my opinion. New Labour have done quite a few things right but I'm starting to wonder if their discard of manufacturing which is in recession, giving up big national companies, is really the way forward. If I actually knew the answer, I'd have Brown's job.
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Bismarck
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(Original post by SamTheMan)
I don't know... would it be that surprising? Surely there are benefits to having at least one British car manufacturer, one big British network equipment manufacturer...
Which are? A 0% growth rate and 10% unemployment rate?
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SamTheMan
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(Original post by Bismarck)
Which are? A 0% growth rate and 10% unemployment rate?
Maybe? I don't know... Many countries with smaller economices than Britain's, manage to defend big national companies with a decent growth rate. I'd say that every country in the world is more economically nationalist and Britain hardly has the most dynamic economy. Far from it...
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JonD
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(Original post by SamTheMan)
IAs for the British economy, as you can see, things aren't too peachy. With manufacturing in recession? Plus comparing us to Sweden is a bad idea. Britain likes to present itself as an alternative to the continental social model but the Scandinavians have had similar growth, increased productivity (while ours is plummeting), and have one of the most solid social models in Europe.If there's one model to follow it's the Scandinavian one, despite its flaws.
But we haven't lost big companies, we've lost big labels. Big symbols. Les look at the physical assets and gains:

- A superior phone network will be built in Britain.
- Ericsson already employs people in this country, and will probably employ more with the extra encouragement.
- Ericsson is probably better when it comes to business if it was richer than Marconi, and capable of buying it, so Marconis assets will probably be better run by them.
- People in this country probably own huge chunks of Ericsson anyway.. they're sure to benefit (and therefore the country).

I've heard we're actually the world's #1 producer of mobile phones; just as we're one of the biggest car manufacturers, despite the brands bieng called un-British things like "Toyota".

The only people I hear complaining about the post-industrial economy are Lowry-lovers, Victorian-nostalgics, the BNP and RESPECT. Not economic credentials in themselves.
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Bismarck
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(Original post by SamTheMan)
Maybe? I don't know... Many countries with smaller economices than Britain's, manage to defend big national companies with a decent growth rate. I'd say that every country in the world is more economically nationalist and Britain hardly has the most dynamic economy. Far from it...
Britain does have one of the most dynamic economies in the world, and I fail to see why you care about national champions when it's clear that they are of absolutely no benefit to an economy.
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SamTheMan
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(Original post by JonD)
But we haven't lost big companies, we've lost big labels. Big symbols. Les look at the physical assets and gains:

- A superior phone network will be built in Britain.
- Ericsson already employs people in this country, and will probably employ more with the extra encouragement.
- Ericsson is probably better when it comes to business if it was richer than Marconi, and capable of buying it, so Marconis assets will probably be better run by them.
- People in this country probably own huge chunks of Ericsson anyway.. they're sure to benefit (and therefore the country).

I've heard we're actually the world's #1 producer of mobile phones; just as we're one of the biggest car manufacturers, despite the brands bieng called un-British things like "Toyota".

The only people I hear complaining about the post-industrial economy are Lowry-lovers, Victorian-nostalgics, the BNP and RESPECT. Not economic credentials in themselves.
Not sure about Ericsson being even remotely British-owned. I didn't say that Marconi should have been "saved" in any way: it was a loss-making burden but in some countries, companies like this would have had the chance to restructure itself and hold on. Remember the ALSTOM fiasco? After 9/11, the naval construction market collapsed and its shares were reduced by half.

I only mentioned Marconi (as people previously mentioned Rover) as an example of British attitude and the state of British companies.

Britain isn't a big car manufacturer, considering the size of its economy actually. I think it's the 7th or 8th producer. Someone might have figures.

It's not necessarily extreme, as you say, to wish for the success of British companies. Most countries do so. This is an expression of British attitude to nationalism and the economy. As many people feel uncomfortable expressing British values, they don't feel they should defend British companies. Whether this is positive or negative is the debate.
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Bismarck
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(Original post by SamTheMan)
It's not necessarily extreme, as you say, to wish for the success of British companies. Most countries do so. This is an expression of British attitude to nationalism and the economy. As many people feel uncomfortable expressing British values, they don't feel they should defend British companies. Whether this is positive or negative is the debate.
And what if someone believes that economic liberalism has been a key British value for much of the last two centuries?
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SamTheMan
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(Original post by Bismarck)
Britain does have one of the most dynamic economies in the world, and I fail to see why you care about national champions when it's clear that they are of absolutely no benefit to an economy.
That's the funny thing. Britain doesn't have a dynamic economy or at least, its growth is slow compared to previous years. What's strange is how Britain had a strong economy during the late 90s and noone abroad really started talking about how great the British economy was until a few years ago. By the time, Britain had built a reputation of being a rich, dynamic country in the eyes of other European countries, its economy had slowed down and the economic dream is clearly over. Recession is not on the cards but the economy certainly isn't dynamic any longer and won't be in the next few years.

I don't care that much about "national champions". Just pointing out that Britain is an exception.
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JonD
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(Original post by SamTheMan)
It's not necessarily extreme, as you say, to wish for the success of British companies. Most countries do so. This is an expression of British attitude to nationalism and the economy. As many people feel uncomfortable expressing British values, they don't feel they should defend British companies. Whether this is positive or negative is the debate.
It's something recent. The house I currently live in hasn't been refurbished since the 70's. Most of the kitchen equipment proudly displays "Made In Britain" or the Crown. Nothing new seems to have that. Perhaps it died along with socialism?

I don't know the answer to that debate (sneaks away)
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technik
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there are plenty of other big british companies out there...
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SamTheMan
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(Original post by technik)
there are plenty of other big british companies out there...
True but aren't they slowly disappearing. It's more from personal experience that I've noticed that there are fewer British global brands. It's something you notice more when abroad (M&S leaving the European market, Cable & Wireless leaving the US market, Marconi being bought out, Orange took over by France Telecom, One2One, not sure that's right, taken over by T-Mobile, mmO2 is going to be bought by Telefonica, BAE Systems probably going to merger or be bought out by Lockheed Martin or Boeing some day). In return, there are few British brands going out there and expanding: Tesco maybe but other companies like Vodafone have come to a halt. Vodafone hasn't managed to get its own company in the US. It only has a 45% non-controlling share of Verizon Wireless. It hasn't managed to buy SFR in France.

It's all part of the global economy of course but where other companies' brands are fairing better (probably thanks to a bit of economic nationalism), British brands definitely seem to be fading away.

Whether that truly matters, probably not. But it's just a curious phenomenon in my opinion.
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