BT pays pounds 70m for key stake in Berlusconi empire

BT is to take a key strategic stake in Silvio Berlusconi's television empire as part of its plans to expand into the Italian telecommunications market in readiness for liberalisation of the industry.

Together with its joint venture partner in Italy, the banking group BNL, BT is paying pounds 70m for a 2.4 per cent holding in Mediaset, Mr Berlusconi's television holding company. In return Mediaset will take a 30 per cent stake in Albacom, the BT/BNL joint venture expected to apply for a third Italian telecoms licence next year to compete in the domestic market.

Details of the link-up between BT, headed by Sir Iain Vallance, and the business owned by the former Italian Prime Minister are due to be announced today. Last night neither company was formally commenting.

The deal coincides with plans by Mr Berlusconi to raise an estimated $1bn (pounds 662m) by selling down his holding in Mediaset from 72 per cent to under 50 per cent.

It also forms part of BT's increasingly ambitious expansion strategy as it seeks to build up its presence in other European markets and reduce its dependence on the heavily regulated UK market.

BT already has a joint venture with Viag of Germany ready to take advantage of the coming deregulation in the German telecoms market. Albacom, meanwhile, is expected to seek a licence to begin competing with Telecom Italia and Olivetti in Italy next year. News of the expansion in Italy came as BT formally submitted its response to UK regulator Don Cruickshank's new pricing formula with a warning that unless the proposals were modified subtantially they would lead to "a slow failure of quality".

BT executives said Oftel's proposal that price rises be limited to inflation less between 5 and 9 per cent for the next four years, would harm investment, jobs and the growth of competition.

However, BT held out an olive branch by indicating that it might agree to the new price curbs being linked to the issue of the wider powers Mr Cruickshank is seeking to impose on anti-competitive behaviour.

BT said it might be prepared to submit to a tougher regulatory regime if the definition of anti-competitive behaviour was clearly defined and it had the right to appeal against any ruling. But it insisted the proposed price regime, due to take effect from July next year, was too harsh.

Mr Cruickshank is due to present his final proposals at the end of May. If BT refuses to accept them it will be referred to the Monopolies and Mergers Commission for an inquiry lasting up to a year.

The regulator says the new price controls could knock pounds 1.3bn a year from BT's cash flow and lower the average domestic bill by about pounds 50 a year in real terms. BT says it would prevent it from earning an acceptable return on investment and deter other players.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
News
news
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
News
i100
Arts and Entertainment
tvChristmas special reviewed
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
tv
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all