AT&T in talks with European utilities

ROBERT ALLEN, the chief executive of AT&T, confirmed yesterday that the big US telecommunications company is engaged in detailed discussions with France Telecom and Deutsche Bundespost Telekom, the German state telephone utility, about a transatlantic business partnership.

'We have had discussions with them with respect to partnering in the last year or so,' Mr Allen said in Detroit. He could not say whether a memorandum of understanding had been drafted by the three companies, as one report suggested yesterday.

AT&T has made no secret of the fact that it has been looking for a European counterpart for the trans- Pacific agreement it signed last May with utilities in Japan and Singapore. Spokesmen for both European companies said it was premature to talk about a formal agreement, although the report - published in Communications Week International - suggested the new venture would be announced early next month.

The joint venture, which would serve multinational corporations active in Europe and North America, would be a direct competitor to the partnership announced earlier this year by British Telecommunications and MCI, the US long-distance carrier. The ventures would offer integrated networking services to global firms, allowing them easy communications among staff on both sides of the Atlantic.

The partners would lock in each other's customers, offering 'seamless' service based on common international standards.

BT paid dollars 4.3bn for a 20 per cent stake in MCI, while AT&T and the two Asian utilities - Japan's Kokusai Denshim Denwa and Singapore Telecom - are expected to invest about dollars 100m in their new business service, which is known as Worldsource. Mr Allen said yesterday that a transatlantic alliance would probably be structured similarly, as a joint venture of the three partners rather than as a closer partnership involving cross-investment; both France Telecom and Bundespost are state companies.