BLUECHIIP: BT has world at its feet - but domestic threat looms
Sunday 23 February 1997
BT and MCI had said a timetable for the merger should see regulatory approval reached by the autumn.
Last weekend, the prospects for a green light received another strong fillip, when the World Trade Organisation reached agreement on further liberalisation of global telecommunications. Participants also agreed in principle to grant companies greater freedom to buy foreign operators.
If that is the view from the WTO, then the deal appears inevitable.
BT shares, buoyed by the announcement, have been strong over the last two months, and there will be gains to be reaped from such a tie-up.
Concert, as the new company will be called, will offer some of the cheapest international UK and US telephone charges, with enormous clout to compete on these routes.
Likewise, BT is forging ahead with alliances in Europe, and now has joint ventures in Germany, Italy, Spain, Sweden, the Netherlands, France and Switzerland. However, many of these will require many billions of pounds in capital investment before they pay off.
While any early decision on approval for the deal is likely to lift BT's shares again, the main core of its business, the UK, will determine its future growth prospects, at least over the next few years.
And here the picture remains less than rosy. Growth is likely to be sluggish as tariffs decline, with new players continuing to enter the market. Competition from the cable companies will only intensify, while other foreign operators can expect to try and build beachheads into the UK.
Although the shares may continue to rise ahead of the merger, and for a while thereafter, there are limited prospects for strong dividend growth, so the shares are probably best rated a strong hold. Copyright: IOS & Bloomberg
- 1 Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
- 2 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 3 Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
- 4 Alex Salmond: 'The rocks would melt with the sun before I'd ever set foot in the House of Lords'
- 5 Ice Bucket Challenge: US firefighter Tony Grider dies after participating in charity craze near power lines
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...