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Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: Neil H who wrote (4807)	3/14/2000 7:58:00 AM
From: matt dillabough	Respond to of 15615

Deutsche Telekom Looks for Partners Associated Press Online - March 13, 2000 18:27 By HANS GREIMEL Associated Press Writer FRANKFURT, Germany (AP) - Deutsche Telekom AG may have backed off its pursuit of U.S.-based Qwest Communications International Inc., but the German giant is still on the prowl for an international partner. The aborted Qwest deal followed a bungled attempt to buy Telecom Italia SpA that also ruined its partnership with France Telecom. At the same time, its Global One alliance with Sprint Corp. and France Telecom has withered on the vine, chalking up mostly losses. Still, analysts are upbeat about Deutsche Telekom's prospects, noting the telecom titan has money to burn - and is too big for any competitor to easily swallow. "Deutsche Telekom has a significant war chest. I can think of 20 to 25 companies they are looking at," said Ian Johnston, a telecommunications analyst with J.P. Morgan in London. "It's not a question of large or small deals. I think they have room for both." With $276 billion in market capitalization, Deutsche Telekom ranks third in the telecom world behind Britain's Vodafone AirTouch PLC and Japan's NTT DoCoMo. That makes it an unlikely takeover target, so it can safely go corporate raiding from the shelter of its locked-up domestic market, where it generates nearly 90 percent of its revenues. A few companies are believed to be at the top of Deutsche Telekom's shopping list, including Spain's Telefonica, Telecom Italia Mobile SpA, Cable & Wireless Communications of Britain and Bermuda-based Global Crossing Ltd. Deutsche Telekom chief executive Ron Sommer has made no secret about his goal of filling in his company's coverage through international acquisitions. Four areas are key to the strategy: mobile communication, data transmission aimed at business customers, Internet networks and e-commerce. Nailing down a bigger portion of Europe's quickly expanding mobile market and catering to high-profit business clients worldwide are likely to take priority for the former state-owned monopoly, which is still 65 percent-owned by the German government. Johnston said the company would likely seal some kind of deal before management is distracted this summer with the planned public offering of T-Online, Deutsche Telekom's Internet service subsidiary. A pairing with Telecom Italia Mobile or Telefonica is seen as helping Deutsche Telekom expand into the mobile market - but neither is a certainty. Telecom Italia Mobile is owned by Telecom Italia, which rebuffed Deutsche Telekom's overtures just last year. And analysts are not enthusiastic about a merger with Telefonica, which would bring extensive holdings in Latin America - a market Deutsche Telekom has traditionally avoided. Teaming with U.S.-based Qwest would have given Deutsche Telekom a global foothold in business data transmission, but that deal ran head-on into a pending merger between Qwest and U S West. Deutsche Telekom's involvement vaporized last week after it was approached to buy out both American companies. Shares were down 5.50 euros, or 5.6 percent, to 92.25 euros ($89.08) Monday in an overall slumping German market. In the data transmission field, Cable & Wireless and Global Crossing still stand out as potential partners. Cable & Wireless recently made itself more attractive by selling off its Hong Kong-based residential service and bulking up on Internet networks. Global Crossing, meanwhile, has been increasing its global stretch with an undersea fiber-optic cable network. But analysts caution that Deutsche Telekom doesn't necessarily need a blockbuster mega-deal. Instead, it may go after a series of smaller takeovers. For example, last year Deutsche Telekom bought out mobile phone operator One2One, the smallest of Britain's four mobile phone companies. In February, it took over Lagardere's Club Internet, France's second largest Internet service provider. - ---= On the Net: Deutsche Telekom, in German with links to English, deutsche-telekom.de -------------------------------------------------------------------------------- % .