Telefonica In Link-Up With Bt & Mci
Telefónica, Spain's national telecommunications operator, on Friday announced a strategic alliance with British Telecommunications and MCI of the US that could radically alter the balance of power in the global telecoms industry.
The announ-cement immediately led to a demand by Unisource for the Spanish company to withdraw. Unisource is the European telecoms alliance in which Telefónica has a 25 per cent stake. Telefónica's departure would weaken Unisource, the vehicle chosen by AT&T, the largest US telecoms group, to exploit liberalising telecoms markets in Europe.
AT&T said on Friday it 'regrets'' Telefónica's decision to pursue 'their own interests at the expense of their partnership'' in the Unisource consortium.
The BT-Telefónica alliance creates a telecoms group with strengths in Europe and Latin America.
Juan Villalonga, chairman of Telefónica, said the alliance would be a leader in world telecoms markets and 'the number one company in the Spanish-speaking world''.
Sir Iain Vallance, BT chairman, said the strength of the alliance would make it much more attractive to potential partners in the Asia-Pacific region.
BT is keen to cement a relationship with NTT of Japan, where it remains comparatively weak.
The deal commits BT to taking a 2 per cent stake in Telefónica for £280 million, while the Spanish operator will take 1 per cent of BT for the same amount.
In a statement timed to coincide with Telefónica's announcement, Lars Berg, Unisource chairman, said: 'The alliance of Telefónica with BT-MCI is considered to be incompatible with its shareholding in Unisource since it will lead to customer confusion and slow down the opening of the European telecommunications market.''
Villalonga argued that the alliance with BT and MCI did not violate the terms of Telefónica's involvement in Unisource, but said: 'We are initiating steps to withdraw from Unisource. I have informed our current partners of this intention and have begun discussions on the conclusion of our arrangement.''
Ben Verwaaye, chairman of the supervisory board of AT&T Unisource, said: 'It is in breach of the terms, the conditions and the spirit of the Unisource alliance.'
Unisource appears to have softened its stance since officials threatened Telefónica with court action. Verwaaye said the two groups would look for a solution outside the courts. 'I can live with Telefónica's withdrawal from Unisource, but I am disappointed such a large company should be turning its back on Europe,'' he said, referring to Telefónica's Latin American ambitions.