On 10th March 1876, Scottish inventor Alexander Graham Bell spoke the first recognisable words on the telephone: "Mr Watson, come here, I want you". Although the growth of the telephone did not happen overnight, this was the first key step in the development of the modern telephone. However, the beginning of the modern communications network that we know today can be traced back even further to the incorporation of the Electric Telegraph Company in 1846, which gave Britain a national communications network for the first time ever. Following Bell's invention, The Telephone Company Ltd was formed in 1878 in the UK to sell telephones. It was taken over by the Post Office in 1912, which by then controlled almost the entire telephone network in the UK.
The growth of the telephone was rather slow, although steady, in the first half of the twentieth century, moving ahead with great speed in the second half of the century. Subscriber Trunk Dialling (STD) codes were first introduced in the UK in 1958 to allow people to call another telephone without having to phone the operator and asking to be connected. On 5th December Queen Elizabeth II called the Lord Provost of Edinburgh from the Bristol Central Telephone Exchange across 300 miles to mark the occasion. The Queen then pressed a switch putting 18,000 telephones onto the new system, although it took another 21 years for the system to be completed.
After that, the development of the phone happened quite fast. For example, pay-on-answer coin boxes on public telephones were introduced in 1959, and the Post Office first introduced freephone to subscribers in 1959. It introduced a freephone services for business users in 1960, which was the forerunner of the BT Freefone and Lo-call services.
Telecoms were part of the Post Office until 1969. The Post Office was a government department with the Postmaster-General sitting in cabinet, but became a public corporation (or nationalised industry) under Wilson's Labour government at the recommendation of the then Postmaster General, Tony Benn. This split the Post Office into two separate businesses thereafter – one for post and one for telecommunications.
The 1970s was an economic mess, and when Britain elected its first female Prime Minister in 1979, the Tories came to power needing to make some money. This led to privatisation, or "selling off the family silver" as former Prime Minister Harold Macmillan famously described it. The telecommunications side of the Post Office was named British Telecom in 1980, and it remained as part of the Post Office until the following year, when it became a separate public corporation under the British Telecommunications Act 1981. The act also created some competition, with Mercury Communications Ltd created in 1982 as the main competitor to British Telecoms. One of the leading players in this was Cable & Wireless. In 1983, British Telecoms and Mercury Communications were given a duopoly on Britain's telecommunications for seven years until 1991, when full competition was allowed. British Telecoms became a Public Limited Company (plc) in 1984, being privatised throughout the rest of the 1980s and right up until the final sell off in 1993. Oftel (the Office of Telecommunications) was created to regulate it, which was transferred to OFCOM (Office of Communications) in 2003. British Telecoms became BT in 1991, and is now one of the largest communications companies in the world.
Freephone 0800 numbers first came about in 1985. 0844 numbers are more recent.