The sad saga of British Telecommunications Plc’s investment in Kannata, Ontario-based PABX builder Mitel Corp, which began when the company agreed to pay the equivalent of UKP180m for a 51% stake in the company back in May 1985 (CI No 184), has ended with the holding – which was in the books at UKP145m – being sold for a paltry UKP18m up-front and a maximum of UKP29.8m. The lowly price underlines the sea change that has swept over the private telephone exchange business over the intervening period: back in 1985, the business was regarded as desirable – IBM Corp was in process of taking full control of Rolm Corp, another investment that turned very sour and was finally unravelled two years ago. Today the PABX market is seen as very mature, there are a host of different ways of doing the things only a PABX could do a decade ago, and stand-alone PABX companies are seen as businesses with little future – witness the lack of interest in British Telecom’s Mitel stake, which has finally gone not to another company in the business but to funds managed by Schroder Ventures. Mitel is now the only significant stand-alone large PABX vendor; the majority of the market is in the hands of full-range telephone exchange manufacturers such as Northern Telecom Ltd, Siemens AG, L M Ericsson Telefon AB, Alcatel NV, GEC Plessey Telecommunications Ltd and AT&T Co.
