In a development that looks almost certain to put the final nail in the coffin of the three-way alliance between Sprint Corp, France Telecom and Deutsche Telecom AG, the German Kartelamt – Cartel Office – yesterday told Reuters that it had written to the European Commission recommending that it veto the Atlas alliance between Deutsche Telekom AG and France Telecom. Under that, the two monopolies were to swap 10% shareholdings in each other to create the underpinning for the alliance with Sprint, with which they would combine all their international operations, each taking a 10% stake in Sprint. The Commission had already expressed grave doubts about the Atlas alliance (CI No 2,612), and with the monopolies body of one of the home countries opposing it, it is hard to see how the Commission can do other than reject it. The Cartel Office said it believed the partnership between the two largest European telecommunications groups would impede competition and violate European competition rules. The bombshell ironically comes at a time when all the parties involved are making hopeful noises about finalising terms of the alliance with Sprint. French Telecom said that while the Memorandum of Understanding between the three was due to expire yesterday, it would not necessarily mean the talks would end nor that a statement would be made. Sprint told industry analysts last week that the price issue of the deal had been resolved, and only one uns pecified issue remained, although speculation is that the trio has had trouble agreeing over how to split up international responsibilities and divide earnings from the venture.
