Battle positions may be shifting, but I maintain my belief DT and FT will not part ways.
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April 19, 1999
Dow Jones Newswires
Telecom Italia-Deutsche Telekom Conference Tuesday 0930 GMT
Dow Jones Newswires
MILAN -- The chief executives of Telecom Italia SpA (TI) and Deutsche Telekom AG (DT) will hold a press conference in London Tuesday at 0930 GMT to outline their merger agreement, officials at the companies said Monday.
The two groups are expected to announce a merger which would create a company with revenues of nearly EUR70 billion.
Telecom Italia's board of directors currently is meeting to review the merger proposal.
Sources close to the German Finance Ministry confirmed Monday that Deutsche Telekom AG's (DT) supervisory board will meet later Monday.
State Secretary to the Finance Ministry, Claus Noe, represents the German government's interests on Deutsche Telekom's supervisory board.
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April 19, 1999
France Telecom Left In The Lurch By Deutsche Telekom
Dow Jones Newswires
PARIS -- Negative investor sentiment came crashing down on France Telecom (FTE) shares Monday, as a possible merger between Deutsche Telekom (DT) and Telecom Italia SpA (TI) threatened to leave the French operator in the lurch.
Telecom Italia late Sunday confirmed widespread speculation that it is examining the possibility of a EUR100 billion merger with Deutsche Telekom. The merger is expected to be confirmed Tuesday.
The slew of question marks left hanging over the future of the French group's joint ventures with Deutsche Telekom kept France Telecom shares at the bottom of the CAC-40 list throughout Monday's session, closing down 5.4%, or EUR4.4, at EUR76.5.
"The shares were looking pretty expensive anyway," noted a London market watcher. "It's more on negative sentiment than any financial impact - these companies made so much noise about the way forward being through international linkups, and here's another one which has bitten the dust."
France Telecom seems to have been caught on the hop by the Deutsche Telekom-Telecom Italia proposed merger, despite the two groups' close collaboration. Friday, the French company was still saying it hadn't been contacted by Deutsche Telekom regarding any talks with the Italian group.
Monday, the France Telecom stance was that Deutsche Telekom can't withdraw unilaterally from its strategic agreements with the former French telecom monopoly. "Our agreements with Deutsche Telekom are clear and incompatible with a unilateral strategic turnaround," France Telecom said. Other than that, though, the company said it is still studying the Germany-Italy linkup plan.
European Union Commission competition watchdogs remain circumspect on the implications of Deutsche Telekom-Telecom Italia linkup. "We would have to examine such a case in the usual manner and look at the effect on the market," an E.U. official said, declining to comment further.
But market watchers point out it is unlikely the E.U. would allow the merger to go through with Deutsche Telekom still maintaining its France Telecom interests. "I think the Commission would definitely have something to say about three of the biggest operators in Europe joining forces," said Robert Grindle, sector analyst at HSBC in London.
France Telecom and Deutsche Telekom established their first links back in the late 1980s, and have been working since September 1998 on the construction of a pan-European network linking major European business centers.
New Cooperation Pact Launched November
In November last year, they launched a new cooperation program, aimed at furthering their partnership in research and development, international networks and purchasing, which was swiftly followed by a 2.0% cross-shareholding pact in December.
The future of the Wind cosortium - a fixed-line and mobile phone project with Enel SpA (I.ELE) on Telecom Italia's home turf - seems to be the most clear cut, with Deutsche Telekom selling its 24.5% stake if the Telecom Italia merger goes ahead.
The Global One joint venture with Sprint Corp. (FON) is a different matter. The company, set up in 1996 to provide services to multinational business customers, has been beset by heavy losses and internal problems, but gave France Telecom a multinational presence and an important foothold in the U.S. market.
Cracks had already begun to appear in the framework, however. Last month, Sprint Chairman William T. Esrey sent letters to France Telecom and Deutsche Telekom indicating his wish to discuss the possiblity of reworking their relationship, since the three companies were unable to agree on a business plan.
Market speculation earlier Monday that France Telecom might be interested in buying out Deutsche Telekom's stake took a downturn in the afternoon when reports surfaced that Telekom is now interested in taking over Sprint, and that a deal is already in the pipeline.
Most of France Telecom's international development has been carried out under its own steam, and won't be affected by any pull-out from the German company.
However, there are two more European projects that will be affected. MetroHoldings, set up in 1998 by France Telecom, Deutsche Telekom and the U.K.'s Energis PLC (ENGSY), specializes in the development of local networks for business customers in London and other major U.K. cities. France Telecom and Deutsche Telekom also have a Swiss fixed-line joint venture, Multilink.
France Telecom wouldn't be drawn Monday on whether it will start looking for a new partner to compete with Deutsche Telekom-Telecom Italia, although London-based analysts put Royal PTT Nederland NV (KPN) at the top of the list.
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A little research done last night:
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Deutsche Telekom and France Telecom to sign cooperation-agreement and cross shareholding and to build European Backbone Network with their national partners.
September 17 1998 -- Deutsche Telekom and France Telecom are pursuing and intensifying their strategic alliance. The Supervisory Board of Deutsche Telekom approved at its meeting in Bonn on Wednesday Memoranda of Understanding (MoU) about the cross-shareholding announced on July, 20 and a cooperation-agreement. The relevant MoUs will be submitted for confirmation to the Board of Directors of France Telecom today.
According to these agreements, the two leading European telecommunications companies will purchase a stake equivalent to 2 percent of each other's issued share capital. With the cooperation agreement, subject to regulatory approval, the two companies are moving closer together in every-day business above and beyond mere financial investments. Additionally, they are generating meaningful operational synergies in selected fields such as research & development, international business and networks, data communications, multimedia business, information systems and phone cards.
The MoUs concerning cross-shareholdings and the cooperation agreement will be signed by the chairmen of both companies, Dr. Ron Sommer of Deutsche Telekom and Michel Bon of France Telecom.
As an important step, Deutsche Telekom and France Telecom have decided to build jointly a European Backbone Network with their European partners and in collaboration with Global One, their worldwide joint venture with Sprint.
This European Backbone Network will connect the major European business centers using leading edge technologies such as Synchronous Digital Hierarchy (SDH) and Wavelength Division Multiplexing (WDM) to increase each fibers capacity, and optimized architectures to provide routing security.
End-to-end-control, seamless infrastructure and centralized network management will allow Deutsche Telekom, France Telecom and their partners to offer high quality services and fast responses to customers requirements.
The initial core network consists of 20,000 km of optical fiber pairs connecting some 40 points of presence in 16 countries. The national networks currently being deployed by partners of Deutsche Telekom and France Telecom will extend the European Backbone to the major cities and business centers in Europe. The reach of the Backbone will also extend beyond Europe through the international networks of Deutsche Telekom, France Telecom, Sprint and Global One.
The European Backbone Network meets the needs of telecommunications markets for data products requiring inexpensive, flexible and reliable transmission capacity. IP services are booming, ATM and multimedia services are spreading throughout both residential and business markets and large customer demand for international connectivity is steadily growing. To benefit from this market growth and further stimulate it, major telecommunications operators need wideband, secure networks with end-to- end-control.
Deutsche Telekom and France Telecom have, as part of their European strategy, invested heavily in partner-operators throughout Europe in markets such as Italy (Wind), Spain (Lince), UK (MetroHoldings), Denmark (Mobilix), Norway (ElTele), Belgium (Mobistar), the Netherlands (Dutchtone), Switzerland (MultiLink) and Hungary (Matav). These operators are key actors in the deployment of the Backbone, both as partners in building the infrastructure and as prime users. Deutsche Telekom and France Telecom will pursue this investment strategy in the future and further new partner-networks will be linked to the European Backbone Network.
The Network will provide Global One with additional transmission capacity to offer more advanced, reliable services to its international customers.
Subject to clearance from the European and national regulatory authorities, Deutsche Telekom and France Telecom will start operating the first loops in 1999 and will reach full operation by the year 2000.
By deploying this new network, Deutsche Telekom and France Telecom are confirming their long term commitment to serve jointly, in close cooperation with Global One and with their European partners, their customers with advanced services based on a state of the art, seamless, cost effective and end-to-end- controlled infrastructure all over Europe.
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Ties between DT-FT go even further with their alliance with Energis:
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Deutsche Telekom, Energis and France Telecom to build new state-of-art telecom networks for Britains cities
April 2 1998 -- Deutsche Telekom, Energis and France Telecom today announce the creation of a new company, MetroHoldings Limited.
MetroHoldings will build new local metropolitan area telecom networks in Britains principal cities, starting in London, thereby extending Energis' existing national network, creating direct links with business customers. Following London, the next cities are expected to be Manchester and Birmingham.
MetroHoldings is owned 50 % by Energis and 25 % each by Deutsche Telekom and France Telecom. MetroHoldings will deliver state-of-art, local telecoms networks more rapidly and more cost effectively than if the three parties were to build these networks on their own. The networks will deploy the latest SDH broadband fibre optic transmission technology - the same technology as used in Energis existing national network. The new network will allow the partners and Global One to develop a full range of innovative, value added services to better serve the needs of business customers in the UK, such as national and international voice and data services and City Nets. This will enable businesses directly to receive higher quality, higher reliability and lower cost telecoms services.
Construction of the local networks is made easier, quicker and less expensive because Energis' existing network, largely carried over the National Grid, already encircles and runs through the major conurbations and, in London, runs through the London Underground. This reduces construction cost and increases construction speed. As the two major European telecommunications operators, Deutsche Telekom and France Telecom will provide their own proven know how and link their respective international networks. Energis will be responsible for network design, planning, construction and network management for MetroHoldings. The Directors of MetroHoldings are Mike Grabiner, Chief Executive of Energis plc, John Beaumont, Director of Strategy and Business Development of Energis plc, Rex Stephenson, Senior Executive Director, Worldwide Networks of Deutsche Telekom, and Francois Comet, Vice President, Alternate Networks of France Telecom.
Commenting on behalf of Deutsche Telekom, Paul Grosse, Senior Executive Director, New Business Development and Management, said : We are very pleased to have Energis as our strong and innovative partner in the U.K. Through the infrastructure joint venture, we have excellent access to local loops. Our customers will benefit greatly from this."
Commenting on behalf of Energis, Mike Grabiner, Chief Executive, said: «This is an important addition to Britainss telecoms infrastructure and will bring state of the art networks to our principal cities. Connecting right to the doors of our business customers will significantly broaden our network reach and reduce our delivery costs. We also strengthen our commercial relationships with two major European telecom operators, with which we already have correspondent relationships on international traffic, and which will use Energis' state-of-art national network.»
Commenting on behalf of France Telecom, Francois Comet said: «Thanks to this agreement, France Telecom will develop its presence in the UK at a reduced cost, thus complementing the international services offered by Global One. We will offer business customers very high quality services at competitive prices. This London network will be connected with the major European business centres and enable corporations to benefit from city to city broadband managed services.»
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More on MetroHoldings:
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Deutsche Telekom, Energis and France Telecom launch operation of three optical fibre rings in London
MetroHoldings joint venture builds high-performance telecommunications networks in Britain's business centres
September 21 1998 -- Deutsche Telekom, France Telecom and the British telecommunications company Energis today put three optical fibre rings into service in London. These highly sophisticated telecommunications networks were set up in Broadgate, Canary Wharf and Aldgate by their joint venture, MetroHoldings Ltd.
Businesses in and around the City of London can now gain direct access to the network, which will offer high-quality, resilient national and international voice and data services at low cost.
The fibre rings are based on the latest synchronous digital hierarchy (SDH) broadband fibre optic transmission technology - the same technology used in Energis' existing network. Deutsche Telekom also operates its 32 City-Netz networks in Germany with SDH technology, and France Telecom offers its customers the advantages of SDH rings throughout France. This approach benefits all three parties involved as it allows the network to be set up fast and cost-effectively.
The next phase of MetroHoldings' London network will see three further rings set up to cover the remaining major business areas in Britain's capital. Following completion of the London network, MetroHoldings will focus on other big UK cities such as Birmingham and Manchester.
Commenting the network launch in London on behalf of Deutsche Telekom, Rex Stephenson, Senior Executive Director, Worldwide Networks, said: "Efficient international teamwork makes it possible for us to offer our business customers in London highest quality voice and data services. Meeting our customers' needs fast, efficiently and cost-effectively is top priority for Deutsche Telekom's international projects."
On behalf of Energis, Mike Grabiner, Chief Executive Officer, stated: "The construction of a new metropolitan network for London demonstrates what international teamwork and working to clearly defined objectives can achieve. This success has cemented the close relationship that already exists between all parties in the MetroHoldings joint venture."
Francois Comet, Vice President of Alternate Networks at France Telecom, said: "We managed to keep costs low for all three partners involved in the construction of the rings. This enables us to offer our customers the best technology at competitive prices which is precisely what they have come to expect from us."
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The critical link for FT-DT in the US is Sprint. They're already jointly invested in Sprint PCS and Sprint [FON], I believe with 20% voting rights, so it'll be interesting to see what happens next. We know G1 wants a seamless backbone, insuring NN's participation with Sprint Domestic. But the question remains, how will DT-FT ensure their presence in the US?
Lots to watch.
Also worth reading:
newsalert.com
newsalert.com
newsalert.com
Pat |
