Outlook: BT and AT&T

BT and AT&T

BRITISH TELECOM shares are plainly even more oversold than its announcements to judge by their ecstatic reaction yesterday to the less than overwhelming news that the company is teaming up with AT &T in some sort of technical alliance for their respective mobile phone services.

This was billed by the company as "a very important announcement", and indeed early wire reports made it into a lot more than it was. Bloomberg had pooling their mobile phone interests into a merged company, a bit like Vodafone AirTouch and Bell Atlantic, while some analysts greeted the announcement as a precursor to an eventual fully-blown merger between the two telecom goliaths. The shares duly raced away.

Unfortunately the detail of the alliance turned out to be little more than a load of old waffle. The idea is to create an entity offering "seamless" mobile telecommunications around the world or, put more simply, what is planned is that you will be able to use your Cellnet phone when you go to the US and vice versa. Actually this prospect is more in the gift of the mobile phone manufacturing companies and progress on agreeing common standards than the telephone operators, but then this is a sector hungry for news and deals. Everything, however frivolous, is gratefully received.

If nothing else, the alliance serves as a reminder of the ups and downs of BT's international strategy. The core of AT&T's mobile phone network in the US is a company called McCaw, which BT used to own a big chunk of until 1992 when it was sold to AT&T for what by