It also emerged that it will take up to a year to gain approval for the deal from competition authorities on both sides of the Atlantic.
One possible line of concern that could be investigated by Don Cruickshank, the UK regulator, is the 13.5 per cent stake in Rupert Murdoch's News Corporation which Concert, the new global company, will inherit from MCI. Mr Cruickshank has recently ordered BT to stop cross-promoting BSkyB satellite TV services in its advertising literature.
BT has already said it expects to take until autumn next year to win official approval A spokeswoman for Oftel confirmed the UK side of the investigation had begun and said: "When we'll finish we can't say. We don't know until we study the agreement what sort of issues we need to address. There are other authorities who will be involved, including the DTI."
AT&T had previously announced its intention to lobby Oftel's US counterpart, the Federal Communications Commission (FCC), and the Department of Justice on the grounds that BT still had a virtual monopoly of local telephone services.
US regulators have made clear they will approve the deal only if US firms can gain similar access to British phone markets as rival operators can achieve in the US.
AT&T has 55 per cent of the US long-distance phone market, while since the group's break-up in the mid-1980s, it has been excluded from the $100bn local market.
However, during a visit to the UK in September, chairman of the FCC expressed serious concerns about the openness of all European telecoms markets. In a speech to the Royal Institute of International Affairs in London, Reed Hundt warned that most European telephones markets remained closed to competition for residential customers.
Mentioning BT alongside the other leading European operators, he said: "If a country has a single, strong national telecommunications firm, it has a big problem.
"In the US we are very lucky that AT&T was broken up by court order in the early 1980s. Yet nowhere else around the globe do we see a repetition of our clearly successfully experiment with demonopolisation."
Shares in BT soared yesterday as most City analysts gave the deal with MCI their seal of approval on the grounds that it boosted short-term value for shareholders.
BT shares ended the day 22p higher at 373p, having risen at one stage to 384p.
The highest rated UK team of telecoms analysts at BZW, the investment banking arm of Barclays Bank, changed their assessment of the stock to a "buy" recommendation while Hoare Govett, the stockbrokers, raised their fair value judgement of BT's share price from 350p to 400p.
BT said on Sunday it would raise its full-year dividend by 6.1 per cent to 19.85p, compared with a 5.6 per cent rise the previous year. Hoare Govett said this alone added 20p to the value of BT shares with the rest coming from the 35p-a-share special dividend, due to be paid next year.
Other analysts argued the special dividend, coupled with the prospect of share buybacks from 1997 onwards, would support BT shares through the turbulence of merging the two organisations.
"They've put an artificial floor under the share price with the dividend. In addition, BT shares will also represent 4 per cent of the London stock market, which means the big institutions will all be squeezed as demand for the shares increases for technical reasons," said John Karidis, from Kleinwort Benson.
However, analysts pointed out that the other main benefits of the deal were based on the potential for future growth which was much harder to calculate.
"I suspect MCI may find it just as hard to break into the local US phone market as the cable companies have found when battling against BT in the UK," said one.
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