BT is expected to unveil its new international business services organisation within the next few weeks, but it won't be the united force some had expected.
In May last year, BT announced plans to create a new services division - tentatively titled BT Solutions - incorporating its international services company Syntegra and its domestic operation Syncordia. At the time it said integration would be completed by the end of 1999.
The move was seen by analysts as an attempt to eliminate the overlap between the two divisions' activities and reduce customer confusion caused by the similar brands.
But at the end of November, BT decided to keep both businesses and brands intact. Research, it said, had shown that Syntegra and Syncordia would "complement each other and have different strengths and market positions."
Further details will be revealed early this year, including the brand of the new group, which won't be BT Solutions. Syntegra said the group will "operate as a portfolio of businesses to individually and collectively address the whole solutions market."
Other services businesses from outside BT may also be added to the group, said a BT spokesman. "It's likely to be bigger than originally envisaged," he added.
One possible outsider that could join the group is AT&T, already an international network partner of BT through the Concert joint venture, which finally opened for business this week.
"It must be something they are bearing in mind," said Pete Foster, analyst at Richard Holway. "I've always been of the view that they were looking for organisations that would be complementing their activities in the UK."
The two companies are already working together. Syncordia announced a deal with AT&T Solutions in December to jointly provide managed network services to General Motors worldwide.
BT wants to expand its services operation worldwide to compete with services giants like IBM and EDS. Combining Syntegra and Syncordia would have helped it achieve this goal, according to Foster.
"If the common umbrella is tight enough, maybe they can hold their own. But when you're talking about EDS you need a massive organisation. They would have a much better chance if they were one organisation," he said.
"There is and will continue to be significant amounts of overlap, so inevitably at some point there is going to be some need to rearrange. You wonder about the extent to which they can benefit from remaining separate," Foster added.
Meanwhile, staff at Syntegra remain in the dark about the exact nature of the shake-up, according to one source. They were promised new management last October, but nothing has yet changed. Another described it as "the merger that wasn't."
Syntegra has revenue of around £600 million, a presence in around 50 countries and 5000 employees. Combined with Syncordia, total revenue would exceed £1.2 billion.
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