BT plays waiting game to gain AT&T all clear

BT faces a one-year wait for regulatory authority approval before establishing its $10 billion joint venture with AT&T, but hopes to avoid problems with lessons learned from the failed MCI deal.

But analysts have predicted hard times for the companies when they face regulators. As the largest phone carriers in the US and UK, the partnership will dominate transatlantic and European communication.

One analyst pointed to the European Commission's (EC) heavy handedness with the WorldCom-MCI merger. MCI was forced to sell all internet assets before the merger was approved.

He said the commission might extract heavy conditions from the companies before approving the deal but if it wasn't too heavy, it would be 'the deal of the decade'.

A BT representative told PC Dealer approval for the deal with AT&T, announced on 26 July, was needed from Oftel in the UK, the Federal Communications Commission in the US and the EC's competition protection division.

'We are familiar with the requirements of all the regulatory authorities after work on the MCI deal,' he said.

BT sought out a deal with AT&T after failing to buy MCI for $24 billion last year, trumped by WorldCom's $37 billion offer.

The venture is an equal partnership between the telecom giants and will pool the companies' international assets to offer complete communications for multi-nationals.

The two are planning a managed Internet Protocol-based global network to support e-commerce, global call centres and Internet-based systems to support global organisations and executives on the move.

The partners forecast first-year revenue of more than $10 billion, growing at 15 per cent a year.