BT and AT&T believe the deal will let them compete better against Vodafone AirTouch, the world's largest wireless company. New technology has companies racing to provide phones that can access the internet and corporate networks from anywhere in the world without wires.
"Mobile communications is very much the future," said Nigel Hawkins, an analyst with Williams de Broe. "It's fair to say that Vodafone AirTouch - in pole position - had to expect that some of the big beasts in the telecoms jungle would try and emulate them over the next couple of years."
Together, BT and AT&T's mobile operations serve 41 million customers in 17 countries and have annual sales of $12bn (pounds 7.4bn). The new alliance, called Advance, won't be a separate company.
More than 226 million customers use cell phones worldwide, and the number is growing by 52 per cent a year. Europeans are leading wireless use, partly as the continent shares a single transmitting standard, allowing callers to use their mobile in any European country. Network operators in the US and Europe use different standards, making most mobiles useless for travellers who cross the Atlantic.
Manufacturers are now making so-called dual- and tri-band phones for use on different standards. Countries and firms around the world also are trying to rally around a new generation of phone service that would use the same standard.
To benefit from a single standard, mobile-phone firms are scrambling to unite to offer global services. AT&T and BT are betting their Advance alliance will be ahead in the contest for business clients.Reuse content