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November 8, 1993

FRANCE TELECOM, BUNDESPOST, AT&T CONFIRM TALKS ON ALLIANCES

By CBR Staff Writer

It has hardly been a secret that Deutsche Bundespost Telekom and France Telecom want to extend their alliance beyond the present Eunetcom facilities management joint venture and that AT&T Co is looking for European partners for its WorldSource facilities management alliance, and in response to reports over the weekend that the two Europeans wanted to merge all their operations apart from domestic voice telephony, and bring AT&T in as a partner, France Telecom confirmed that it is working with Telekom on terms of a wider partnership. We have presented to Brussels proposals for developing a partnership to face up to the opening of markets from 1998, the French state phone company said, adding that AT&T was a possible partner among others. Telekom confirmed that talks are taking place between Eunetcom. AT&T chairman Robert Allen confirmed that the company is involved in joint venture discussions with the two. According to Reuter, observers believe the two Europeans want to merge management of telephone lines, leased lines and data services and that at a later date, they could build a pan-European multumedia network for data and eventually voice traffic, the sources said. The proposed alliance is seen as a defensive move against the proposed British Telecommunications Plc-MCI Communications Corp alliance. Any formal alliance between France Telecom and Bundespost Telekom involving cross-shareholdings must wait for privatisation, and that’s not due to get under way until 1996. British Telecom said any such alliance would create a monopoly that would defeat European competition aims. If the alliance did proceed, BT would likely rally as many as possible smaller European operators to its camp.

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