In a fatal blow to Italian hopes of creating a telecommunications company capable of playing a role on the world stage, Fiat SpA last week pulled its Telettra subsidiary out of the proposed Telit SpA merger with state-owned Italtel. Fiat cited the the persistence of behaviour that has already been stigmatised and that contradicts fundamental agreements necessary for the running Telit, and left the venture with sorrow and bitterness. The civil service side claimed that one partner wanted to prevail. Plessey has already begun forging ties with Italtel, which is strong in switching. Telettra is strong in transmission equipment and is likely to be wooed by the STC-Northern Telecom alliance and by the joint AT&T-Philips Telecommunications firm. Ericsson and Siemens had both said they wanted relationships with Telit but in any negotiations now, the two Italians will be in a much weaker position to bargain than would a merged Telit company.
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