The market, the monopoly and Mercury

Published in Accountancy magazine

Article Abstract:

Mercury Communications was created in 1982 in order to provide an alternative to the monopoly enjoyed by British Telecom (BT). BT had proved inefficient and it was hoped that a competitor would provide quality service and hasten the reform of BT. Office of Telecommunications Director General Sir Bryan Carsberg is currently undertaking a review of the duopoly to analyze the progress made in modernizing the UK telecommunications system, whether that progress is attributable to privatization, and whether more progress can be stimulated by the introduction of more competitors. Mercury is profitable and has provided an impetus for BT becoming more efficient in order to remain competitive. Mercury had pre-tax profits of 66 million pounds sterling on a turnover of 492 million pounds, processes three million calls a day, and enjoys a 12% share of all international calls and half of international digital private lines.