AT&T, British Telecom to Form Intl Venture, CNBC Says (Update1)
Bloomberg News
July 24, 1998, 8:09 p.m. ET
AT&T, British Telecom to Form Intl Venture, CNBC Says (Update1)
(Adds background.)
New York, July 24 (Bloomberg) -- AT&T Corp. and British
Telecommunications Plc could announce an international joint
venture as early as this weekend, CNBC reported. No assets were
discussed, though the alliance would give AT&T access to the U.K.
market and British Telecom access to the U.S. market, and AT&T
would replace MCI Communications as British Telecom's U.S.
international partner. British Telecom and MCI entered a joint
venture in 1993, though that deal will be over as soon as
WorldCom Inc. completes its purchase of MCI, CNBC said.
AT&T wouldn't comment on what it called a ''speculative''
story.
In 1996, British Telecom agreed to buy MCI to further their
joint venture, called Concert Communication Services, which
provides phone services around the world to international
companies. That agreement was broken up last November by No. 4
U.S. long-distance company WorldCom, which outbid British Telecom
and agreed to pay $7 billion in cash for the U.K. company's 20
percent stake in MCI.
Since then, British Telecom has been looking for new
partners in the lucrative U.S. market. After WorldCom completes
the MCI purchase, expected later this summer, the combined
company will be a non-exclusive distributor of Concert's services
in the U.S.
British Telecom agreed to buy MCI's 24.9 percent stake in
Concert for an undetermined amount.
The agreement would extend the reach of AT&T, whose own
Unisource venture with several European phone companies has
lagged Concert in signing up partners and customers. The AT&T-
Unisource alliance doesn't give AT&T the ownership of networks
Chief Executive C. Michael Armstrong says he needs to serve
customers better.
Armstrong, who joined the U.S.'s largest phone company last
fall, has been moving quickly to cut costs and boost sales by
investing in high-growth businesses: wireless, local, Internet
and international.
So far, he's checked off all but international --
culiminating with an agreement last month to buy No. 2 U.S. cable
company Tele-Communications Inc. for $45.6 billion in stock and
assumed debt to boost local phone sales.
''AT&T needs to strengthen its global reach, and BT has been
desperately searching for a way to tap the U.S. market,'' said
Jeffrey Kagen, president of market researcher Kagen Telecom
Associates.
(CNBC 7/24)
--David Wells in the Princeton newsroom (609) 279-4053 and Andrew |
