AT&T Co is to take a 20% stake in Unitel Communications Inc of Toronto under a deal that will enable AT&T to offer seamless trans-border services to US multi-nationals with Canadian bases. Unitel would also offer trans-border services to Canadian multinationals customers. Under the agreement, Unitel would use AT&T’s intelligent network software, switching and transmission equipment in its Canadian network and gain access to AT&T’s marketing and operations expertise and to Bell Labs research. In return for its intelligent network platform, AT&T would get the 20% stake and two seats on its nine-member board; its initial investment is put at $120m. Unitel is currently owned 60% by Canadian Pacific Ltd, 40% by Rogers Communications Inc and these shares would fall to 48% and 32%. After closing the agreement, the three shareholders will inject $160m of common equity into Unitel. In mid-1993, Unitel and AT&T would start joint marketing of some trans-border services, including virtual speech and data network service on the public network; packet and Frame Relay data services on the public network and digital high-speed private line service. Howls of protest to regulators are expected from their competitors.
