BT group in pounds 1.5bn Italian plan

British Telecom and its partners in the Italian telecommunications joint venture Albacom plan to invest up to pounds 1.5bn over the next five years if they are awarded a licence to provide full telecoms services in Italy.

The joint venture will bid for the licence next year in competition with a grouping led by the Italian financier Carlo de Benedetti and France Telecom.

Alfred Mockett, managing director of BT Global Communications, said yesterday that Albacom would be in a prime position to take advantage of the liberalisation of the pounds 11bn Italian market as competitors are allowed to take on the duopoly of Telecom Italia and Olivetti.

He was speaking as BT and the Italian bank BNL, joint owners of Albacom, confirmed they are to pay pounds 71m for a 2.4 per cent stake in Silvio Berlusconi's television empire Mediaset. In return Mediaset is paying pounds 22m for a 30 per cent stake in Albacom.

Mr Mockett described the cross-shareholding arrangement as a marriage certificate. As a dowry, Mr Berlusconi is giving Albacom all the telecoms business of Fininvest, the parent company of Mediaset.

The deal will give BT access to Mediaset's microwave network, which consists of 1,800 sites across Italy that could be used to launch a mobile telephone service. BT will also be able to take advantage of Mediaset's three network national television stations and its voice network.

A Mediaset spokesman said the Albacom joint venture would initially target big Italian industrial groups such as Fiat for their telecoms business.

BT and BNL are also likely to sell off more of their holding in Albacom, with Snam, the gas business of Eni, a possible investor.