British Telecom courts GTE
NEW YORK - British Telecom, on the rebound after MCI jilted it, has opened preliminary merger talks with phone giant GTE, USA TODAY has learned.
Such a deal - though smaller than a BT-MCI combination - would give the British phone carrier a much wanted stake in the $200 billion-a-year U.S. telecommunications market.
BT also is considering a double acquisition. Just as WorldCom simultaneously announced plans to buy MCI and a small local phone company, Brooks Fiber, BT might make a bid for GTE and a smaller carrier, such as Teleport Communications or Intermedia.
Despite the talks, BT continues to keep its options open. It also has held talks with two regional Bells: Bell Atlantic and SBC Communications.
Bell Atlantic CEO Ray Smith recently met with BT Chairman Sir Iain Vallance at BT offices in Britain.
And while it is not clear whether BT officials have yet met face to face with SBC Chief Executive Ed Whitacre, BT strategists have explored the idea of a combination.
"We are talking to a number of companies in North America about possible future partnerships, but we will not sign any deals until the MCI-WorldCom deal is closed," BT spokesman Jim Barron says.
GTE officials did not respond to requests for comment on this story.
While BT's U.S. strategy is still taking shape, it might fall rapidly into place. A decision could be made during the first quarter of 1998. Talks with GTE - focused on how the companies might work together as opposed to specific terms of a deal - already have taken place at the highest level.
GTE Chief Executive Chuck Lee met with British Telecom officials at the U.S. company's offices in Stamford, Conn., the week after MCI accepted an offer from WorldCom.
GTE appears to be favored over the others for several reasons. There are cultural and technological similarities between GTE and BT.
GTE's interactive cable TV service, broadcast in Florida and Texas under the Americast name, is similar to BT services in Britain.
And GTE has some of the aggressive marketing style that BT was hoping to find in MCI. GTE has signed up more than 1 million long-distance customers, most at AT&T's expense.
"GTE and BT have had discussions in the past. They are familiar with each other. There are open lines of communication," says Scott Cleland, director of the Precursor Group at Legg Mason Wood Walker. He said an alliance with a Bell was less likely because the Bells can't offer long-distance service in the USA.
By Steve Rosenbush, USA TODAY |
