Telecoms equip- ment supplier Marconi was dealt a fresh blow this week when it failed to win a role on BT's £10bn 21st Century Network (21CN) tender. Analysts, who just days earlier had been predicting a win worth up to £700m over the next five years, quickly downgraded estimates and recommendations. Shares in Marconi fell 40 per cent as commentators raised questions over the company's long-term future, wiping around £500m from its market value in a matter of hours.
The shock was even more pronounced given Marconi's longstanding relationship with BT. It has been the primary supplier to the UK's largest telecoms operator for decades, and BT remains Marconi's largest customer, accounting for 26 per cent of revenues. In fact, Marconi was one of only a handful of suppliers to take part in the trial stages of the 21CN project.
So, after winning acclaim for its technology from BT, as well as supplying commercial volumes of its broadband Access Hub, further work looked a given. "This is the opportunity that has been absolutely central to Marconi's plans for the past couple of years," says analyst Mark Davies-Jones at house broker, JP Morgan. "What was unthinkable was that Marconi would be awarded nothing." He notes that even competitors were surprised by Marconi's absence from the final list.