Consolidation in world telecommunications to gather pace

Consolidation in world telecommunications will gather pace today when Bell Atlantic and Nynex announce a pounds 33bn merger to create America's second-largest telephone company after AT&T, The combined market capitalisation is comparable to BT and Cable & Wireless which, it emerged yesterday, have set a deadline of a month to reach agreement on their own merger. According to one report, C&W is insisting that BT first settles its feud with Don Cruickshank, the telecoms regulator.

The US merger was approved by the Bell Atlantic board on Saturday and came two months after President Bill Clinton signed a sweeping telecommunications deregulation bill. The transaction is a share swap, with Bell owning slightly more than half of the new company, which is expected to make an early push into long-distance services, especially across the Atlantic. Raymond Smith, current chairman of Bell Atlantic, will preside over the new company for one year, then making way for Ivan Seideberg, chairman of Nynex.