BT spends pounds 550m on Canada ventures

BT AND AT&T strengthened their positions in Canada's pounds 10bn telecommunications market yesterday with two joint venture deals.

The two companies are paying pounds 600m for a 33 per cent stake in Rogers Cantel Mobile Communications, one of Canada's top mobile phone operators with about 2 million customers. Majority-owned by cable television conglomerate Rogers Communications, it also runs a range of paging, interactive messaging and mobile date services. AT&T and BT will have equal shares of the holding.

BT is also acquiring a 9 per cent stake in AT&T Canada for about pounds 250m. The business operates local, long-distance and Internet services. It recorded losses of pounds 180m on turnover of pounds 560m last year. The stake is being acquired from AT&T.

This is the second occasion on which BT and AT&T have signed joint deals since the two unveiled a proposed $10bn (pounds 6.25bn) global venture last year. The first was an investment in Japan Telecom in April.

BT said the two Canadian deals would accelerate the bundling and joint marketing of fixed and mobile services for business customers as well as an improved mobile phone offer.

Alfred Mockett, chief executive of BT Worldwide, said the deals would "enable BT to take an active part in the Canadian business and mobile market". He said that mobile phone penetration in Canada currently stands at just 30 per cent, leaving significant room for growth.

AT&T Canada has a 20,000-kilometre fibre-optic network and local access facilities in the 14 biggest cities. It also controls one of the largest Internet service providers in Canada, with 165,000 customers. BT has been criticised for being slow to take advantage of Internet opportunities.

BT's investment in AT&T Canada will be held by another new company set up to hold interests in Canadian wired communications. It will be called Wireline and be 70 per cent owned by AT&T and 30 per cent by BT.

BT shares yesterday closed 31p lower at 955p.

John Zeglis, AT&T president, said: " With the AT&T investments in Canada, customers there will have even better access to leading national mobile and national fixed services, connected to the North American and global reach of AT&T."