Franco-German telecom venture expects approval

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The Independent Online
France Telecom and Deutsche Telekom were last night confident their controversial joint venture would win European Commission approval and vowed to meet competitors head on in the European telecoms market.

In his first big press conference since becoming the third president of France Telecom in as many weeks, Michel Bon said the joint venture, dubbed Atlas, "was still under negotiation, but we have every hope of reaching an agreement".

Ron Sommer, the Deutsche Telekom chief executive, earlier said progress was being made in the company's negotiations with Brussels and that he was optimistic the joint venture would be approved. Their comments came at the end of the first day of Telecom '95, the telecommunication industry's four-yearly extravaganza in Geneva.

The two men, along with senior government officials from France and Germany, met Commission officials late last week in an effort to forge a breakthrough. A second meeting is set for mid-October.

The Commission has held up approval of Atlas in order to pressure the two companies and their respective governments into liberalising their telecoms markets in advance of a 1 January 1998 deadline.

Specifically, Brussels wants assurances that competitors will be able to offer services to businesses, and that the two Telecom companies will not use their dominant positions to shut out other suppliers.

France has already agreed to licence competitors such as utilities and the national railroad company, SNCF, which have alternative cable networks along established rights of way.

Germany, however, has been slower to move, as the government fears any threats to Deutsche Telekom could torpedo its plans for a multi-stage privatisation to be launched next year.