The long-rumored and less-than-secret negotiations between AT&T Corp and Societa Finanziaria Telefonica per Azioni, Stet SpA, has finally concluded with the Italian telecommunications company joining the AT&T-Unisource alliance and setting up separate ventures with AT&T in Latin America. Stet takes its place less than four months after Spain’s Telefonica de ESPN quit its long- term engagement with the AT&T alliance in favor of BT/MCI’s soon- to-be formed Concert Communications alliance. The talks with AT&T had been rumored to have been taking place well before Telefonica left but not before fears of the Spanish company’s departure were first raised. Like Telefonica much of the attraction for the alliance is Stet’s links to the Latin American market and Stet’s dominant position in its own home territory. The deal sees Stet forming one partnership with AT&T and another with AT&T’s European alliance AT&T- Unisource Communications Services (AUCS). AUCS is also a member of the AT&T WorldPartners Association. Under the agreement in Latin America, AT&T and Stet are to form a 50-50 joint venture delivering global services to the region, with two pan-American operating entities to be formed. The first will serve multinational, large and medium-sized customers, the second will offer telecom transport services to telecom providers. In Europe, Stet has the option to take a significant stake in AUCS, estimated to be 30% – equal with AT&T’s stake with Unisource maintaining a majority holding with 40%. It will distribute AT&T-Unisource services in Italy, and transfer data and telecommunications business from its Telemedia International unit into AUCS. The venture says it will be targeting its efforts in winning business in those countries that have remained outside the alliance, primarily France, Germany, the UK and Spain. The alliance lost its position in the Spanish market when Telefonica defected but may gain second best if the consortium headed by Stet and Groupo Endesa win the bidding for 60% of Spain’s second largest telecoms carrier Retevision. The deal will also see Stet transfer the relevant European business activities of Telemedia International (TMI), which provides data and telecommunications services, to AUCS. Stet is now the world’s fifth largest telecoms carrier in terms of revenue, and the largest European mobile operator through its Telecom Italia Mobile subsidiary. The agreements of principle are now to be put into definitive documents by the end of this year. The deal will be subject to governmental and European Union approvals. Stet is the world’s fifth largest telecoms carrier in terms of revenue and, through its Telecom Italia Mobile subsidiary, the largest European mobile operator. Stet recently raised its stake in Cuban Telecom ETECSA but according to Stet, Cuba would not be excluded from the AT&T deal.