BT to Scrap Traditional Phone Network

British Telecom PLC announces plans to move to IP telephony for most of its 28 million customers by 2008

LONDON (AP) _ British Telecommunications PLC plans to gradually shut down its traditional "circuit-switched" telephone network in favor of technologies that route calls over the Internet at a lower cost, with more features.

The new system _ to cost an estimated 10 billion pounds ($18.2 billion) _ is expected to be operational for most of BTs 28 million customers by 2008, the company said Wednesday. The change will involve electronic and computer-system changes, not construction work such as digging up roads or pulling down phone lines, BT said.

The new program "will deliver our vision of a converged, multimedia world where our customers can access any communications service from any device, anywhere _ at broadband speed," Paul Reynolds, chief executive of BT Wholesale, told reporters.

It would give each subscriber the ability to have one phone number, and the same bill, for mobile and fixed-line services. Matt Beal, in charge of implementing the changes, also said in an interview with the British Broadcasting Corp. that the new system would bring customers such features as family conference calls, video streaming and voice-activated phones. BT said that by the 2008-2009 fiscal year, the new network would save the company about 1 billion pounds ($1.8 billion) annually.