Portugal Telecom SA duly announced yesterday that it is indeed joining the Concert alliance of British Telecommunications Plc and its acquisition partner MCI Communications Corp. The deal is aimed principally at strengthening operations in Latin America. British Telecom and MCI will take stakes of 1% and 0.5% respectively in Portugal Telecom to seal the deal but the Portuguese company will not take a stake in Concert. Portugal Telecom already has a long distance joint venture with Brazil’s state-controlled Telebras to provide long-distance services in Brazil, Portugal and countries in Africa where Telecom already operates. British Telecom gets a seat on the Portugal Telecom board, and Portugal Telecom becomes the exclusive distributor for Concert Communications Services’ voice products in Portugal. Portugal Telecom also said it was still talking to other international partners about the possibility of their taking a stake in the company despite having opted for Concert as its global partner – with Telebras high on the list of preferred partners. The alliance got off to a rather rocky start however, when Portugal Telecom SA said in its announcement of the Anglo-American deal that MCI had already reached a deal for an alliance with Telefonica de Espana SA to deliver to Latin America. Telefonica and MCI denied an announcement was imminent, but made no statement about the status of their talks. Telefonica also pointed out that it was still in talks on an alliance with AT&T Corp. Meantime, British Telecom said that it would be seeking a listing on the New York Stock Exchange for the new shares in Concert Plc which will be issued to MCI shareholders in the takeover.
