Marconi Corporation used the cash raised by selling the defence arm to buy US telecoms companies, with the aim of becoming a major telecommunications systems provider.

In August 1998, GEC acquired Siemens' 40% stake in GPT (at this point only existing as a legal entity), and merged GPT with the telecoms units of its other subsidiaries – Marconi SpA, GEC Hong Kong, and ATC South Africa – to form Marconi Communications.

[3][4] Following the announcement of the Marconi Electronic Systems demerger on 19 January 1999, GEC focused on the booming telecoms sector.

It purchased two American equipment-makers to complement its existing telecommunications businesses, RELTEC Corporation (March 1999) and FORE Systems (April 1999).

Marconi executives meanwhile reassured investors; the Financial Times judged they were "either failing to see the warning signs, or ignoring them.

[6] Following a contentious board meeting that evening, Marconi announced 4,000 job cuts, a 15% drop in sales forecasts, and a 50% fall in operating profit to March 2002.

A second profits warning in September 2001 led to the dismissal of Lord Simpson (the CEO) and Sir Roger Hurn (Chairman).

[14][15] The company was a major supplier of asynchronous transfer mode, gigabit Ethernet, and Internet Protocol products.

[20] The three Enterprise Technology Centers were based in San Jose, California; Vienna, Virginia; and Israel.

The San Jose Technology Center, which had been responsible for management of Marconi's gigabit Ethernet solutions, broadened its research focus to include development of application-oriented platforms, connection-oriented uplinks between connection and connectionless networks, deep packet inspection solutions, and predictable quality of service.