AT&T to Replace MCI as British Telecommunications' US Partner

Strategic Insights -

British Telecommunications PLC will replace MCI Communications Corp. as AT&T's partner in an international joint venture, giving both companies access to new customers and new markets. The possible multibillion-dollar deal is set to replace the existing Concert partnership between BT and MCI, which is being dissolved as a result of WorldCom's acquisition of MCI. The deal would mark AT&T's aggressive expansion under new leadership since Chairman Michael Armstrong took over last year.

Key Takeaways:

  • AT&T will replace MCI as British Telecommunications' partner in an international joint venture, providing access to new customers and markets.
  • The possible multibillion-dollar deal is set to replace the existing Concert partnership between BT and MCI.
  • WorldCom's acquisition of MCI for $37 billion will lead to the dissolution of the Concert partnership.
  • AT&T has been in talks with British Telecom for weeks to form an international venture.
  • The deal would continue AT&T's aggressive expansion strategy under Chairman Michael Armstrong.
  • British Telecom has considered partnering with several US carriers, including Bell Atlantic Corp., Sprint Corp., and Qwest Communications International Inc.
  • AT&T's recent acquisition of Tele-Communications Inc. and Teleport Communications Group marks its aggressive expansion in the cable and local phone markets.

Statistics:

  • AT&T's acquisition of Tele-Communications Inc. was worth $50 billion (though the source does not specifically state the purchase price, it is implied to be a large deal)
  • AT&T's $11.3 billion purchase of Teleport Communications Group was completed on Thursday
  • WorldCom's acquisition of MCI was worth $37 billion
  • The Financial Times reported that AT&T was on British Telecom's short list of US carriers, alongside Bell Atlantic Corp., Sprint Corp., and Qwest Communications International Inc.
  • British Telecom has called North America a strategic market and is seeking opportunities.

Sources:

  • CNBC (citing sources close to the situation)
  • The Associated Press (reporting on AT&T's comments on the CNBC report)
  • The Associated Press (reporting on AT&T's comments on its acquisition of Tele-Communications Inc.)
  • Business Week (reporting on AT&T's talks with British Telecom)
  • The Financial Times (reporting on British Telecom's short list of US carriers)
  • CNBC (citing sources close to the situation again)