Mannesmann AG yesterday raised a question mark over Cable & Wireless Plc’s continued participation in its Mannesmann Mobilfunk GmbH cellular telephone company: the 5% stake was called into question when the London company decided to make Veba AG its major telecommunications partner in Germany and inviting Veba to buy a 10% stake in it in the market. Cable & Wireless responded that it was reviewing stake in Mannesmann Mobilfunk but would not comment on the view expressed by a Mannesmann director that it was likely to sell. All I can say is that we are reviewing our position in the light of our interest in E-Plus that our alliance with Veba gives us, the company told Reuters. E-Plus is of course Germany’s third mobile phone operator, and is owned by a consortium including Veba, steelmaker Thyssen AG and BellSouth Corp. As a result, Mannesmann will likely need a new partner and Peter Mihatsch, board member for telecommunications, confirmed that he has been in co-operation talks with AT&T Corp. Mannesmann plans to spend at least $2,200m over the next four years to become a major player in the global telecommunications business – it has invested some $2,170m since 1989 to set up its D2 cellular telephone network and other telecommunications activities ranging from data networks to a stake in EUnet, Germany’s biggest provider of Internet services. Over the next four years we will invest at least this much again, that is the absolute minimum, Mihatsch announced. The board has not given me a blank cheque, but enough to really become a big player. Mihatsch sought to play down the talks with AT&T, and according to Reuter’s man in Dusseldorf, industry sources have said that the talks have been stalled because Mannesmann refuses to bring its cellular activities into a potential alliance between AT&T and CNI Communications Network International, the Mannesmann-led telecommunications venture with power utility RWE Energie AG and Deutsche Bank AG. An exchange of equity is not necessary, Mihatsch said. It would be possible to offer the same services to customers through a co-operation.
Not in a hurry
Mihatsch is just back from a week in Japan, and said he was in talks with five or six potential partners, hinting that a deal with AT&T might not be the most appropriate. We are not in a hurry, he said, adding, Why does our international partner have to be American? The important thing is knowing what we will get in return. Mannesmann is seeking a partner or group of partners with extensive experience in offering complex communications services and with access to transcontinental networks, and while the two big British operators have as much experience internationally as anybody theser days, each has chosen another partner in Germany, British Telecommunications Plc going with Viag AG. While Mannesmann Mobilfunk GmbH groups the company’s mobile phone activities, Mannesmann Eurokom GmbH will be the focus of investment over the next few years. The latter holds 50% of Communications Network International, which will seek a licence to operate basic telephone services in Germany when the market is deregulated in 1998. Meantime Mannesmann Mobilfunk expects to have 1m subscribers in the next few weeks, but still lags Deutsche Telekom AG, which has just passed the 1m mark.
