Sir Christopher Bland, BT’s chairman, has instructed those negotiating with AT&T that a resolution to the long-running debate over Concert’s future is vital before BT publishes a prospectus on the demerger of its mobile phone division early next month.
The prospectus will include updates on all major aspects of the group’s business. BT is anxious to give a picture of stable prospects for Future BT, the name given to the rump of the company following the wireless demerger.
A briefing with analysts has also been planned for September 5. Many expect BT wants some concrete answers to the Concert dilemma before then. At the time of BT’s last quarterly results in July, Philip Hampton, BT’s finance director, conceded BT would probably have to write down the value of its investment in Concert if it was broken up.
Concert was set up in 1998 to provide voice and Internet services for multinational business customers but has suffered losses in the region of GBP300m per quarter.
AT&T is believed to be less convinced that a final agreement could be reached within BT’s self-imposed deadline. Furthermore, talks between Concert’s owners have been hampered by the lack of any pre-nuptial agreements detailing how joint assets and customers should be divided in the event of separation. In particular, they are not thought to have agreed on a valuation method for determining how valuable each customer is and are still collecting data on this.
BT’s 50% stake was recently valued at $2bn in the company’s accounts, but Mr Hampton stressed that any write-down would be considerably less than this due to the value salvaged from returning customers and network assets.
