BT, AT&T Forge Global Mobile Alliance
September 16, 1999
Filed at 11:02 a.m. EDT
By Reuters
LONDON (Reuters) - British Telecommunications Plc. and its U.S.
partner AT&T said Thursday they had formed a strategic pact to provide
voice and data services for globe trotters and multinationals sick of
incompatible technologies.
``We hope to sell them one (product) for the world ... and a set of
services that is consistent across the globe,' said Jordan Roderick,
executive vice president of AT&T's wireless technology and products
division.
Although mobile products such as cellphones have become one of the
world's biggest growth industries, their use has been frustrated by a string
of different international standards that do not allow subscribers to pick
up messages, find data and make calls easily across the world.
``It's a pain in the neck,' Andy Green, BT's director in charge of strategy
and development, told a hastily convened London news conference.
``The thing just doesn't work.'
BT and AT&T said they had enough market clout to win the ear of
manufacturers to help develop the technology and networks to allow their
customer base of 41 million wireless subscribers across 17 countries to
use one device across the world.
Hoping to cash in on a lucrative market and win new customers, BT and
AT&T said manufacturers such as Lucent, Nortel, Ericsson, Nokia and
Motorola would make products bridging the technological gulf dividing
the world's northern and southern hemispheres.
``The world needs some leadership in this area,' they vowed. ``We're
trying to change the way the world buys wireless.'
BT SHARES SURGE
Shares in BT shot up six percent before settling at 927p, a rise of just
over four percent, by 1430 GMT, as investors applauded a deal which
adds to a $10 billion global joint venture announced in 1998 to serve
multinationals, carriers and Internet companies with fixed line services.
``It is good for BT's share price because the company has got together
with one of the biggest beasts in the global jungle,' said Nigel Hawkins of
stockbroker Williams de Broe.
Other analysts said the deal could be another step on a road that may
eventually lead to a takeover of BT by AT&T.
``They are moving closer and closer together and eventually, I think,
there could be a full merger,' said John Tysoe, telecoms analyst at
WestLB Panmure.
The move comes as British-based Vodafone AirTouch Plc, the world's
largest mobile phone company, is trying to hammer out a deal to form a
U.S. business alliance with key East Coast U.S. carrier Bell Atlantic
Corp.
But few analysts said BT and AT&T's deal threw down the gauntlet to
the world's cellphone market leader, saying instead it was a ``step in the
right direction' for their competitive positioning.
BT, AT&T POOL RESOURCES INTO ``ADVANCE'
BT and AT&T promised to start testing some data services next year
that work on GSM (Global System for Mobile Communications)
technology, which is used mainly in Europe and Asia, and rival TDMA
(Time Division Multiplex Access) used mainly in North and South
America.
The new venture, dubbed Advance, allows BT and AT&T to combine
``hundreds of millions of dollars' of investments to develop applications
that run over their wireless networks which both groups are upgrading to
support high-speed data services.
Roderick said BT and AT&T's entire networks would be fully upgraded
to support the new technologies and products by 2003.
The companies also said they would take a common position on the
latest technologies, such as third generation mobile and mobile Internet
standards, pooling resources to gain economies of scale in purchasing
and investment decisions.
The Advance pact, which needs no regulatory approval, also plans to
offer a new mobile Global Account Services package to give
multinational customers global contracts and consolidated management
information. This will be tested later this year.
``Our joint vision is to be global leaders in mobility by providing
seamless, best value, leading technology services to our rapidly growing
customer base around the world -- and to enhance shareholder value,'
said BT's Chief Executive Peter Bonfield in a statement.
Copyright 1999 The New York Times Company
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