[London, ENGLAND] BT
indicated in a statement issued over the weekend that
it is holding discussions with AT&T
with a view to merging more of their respective businesses.
The two companies already have a major joint venture in
Concert, the successful launch of which has led to
the current discussions.
Observers have for some time recognized that BT and
AT&T have similar cultures, having undergone
traumatic upheavals in recent years after a long
period of monopolizing telecoms markets on
either side of the Atlantic.
Sunday’s statement from BT did not go so far as to
say that a full merger was being considered.
“These discussions include exploring ways of broadening
and strengthening the scope of the relationship between
BT and AT&T in business services,” said the statement,
with the warning that the discussions “may or may not lead
to any change in the existing alliance arrangements.”
To some, it may appear that BT is becoming addicted to
structural change, having announced in April a radical
restructuring of its business, including the creation of
three new international businesses – Ignite, BT Wireless
and BT Openworld. The rationale behind this move was to
group operations according to operational rather
geographical parameters.
As the statement explained, BT’s strategic review has
been an ongoing process for much of the year, with the
aim of maximizing shareholder value, increasing efficiency,
and improving services to customers. However, the market has
not yet responded by marking up BT shares, which are still
hovering just above their 52-week low point.
Having spent lavishly on third-generation wireless
licenses, including another US $370 million in Holland
in July, BT has made some divestments, including the
sale this month of part of its Aeronautical and Maritime
division to Stratos Global Corporation for US $222 million.
Later this year, the outcome of the AT&T discussions
will become clear, while BT is also expected to announce
IPOs for some of its international businesses. In the
meantime, it remains to be seen whether the current
statement is sufficient to jog the share price upwards.
