BT gains total control of Viag Interkom

BT wants to strengthen its market position in Germany

Telenor, the Norwegian telecoms company, has decided to sell its 10% stake in Viag Interkom to British Telecom (BT), giving the UK telecoms company 100% control of the German mobile phone firm.

"We are delighted we will be strengthening our position in a country which is a central part of BT's market focus within western Europe," BT said in a statement.

BT is tied by an option deal with Telenor which obliges it to buy the Viag stake for 1.61bn euros.

"The cost of the remaining stake held by Telenor was fixed earlier [in 2000]," BT said.

The put option expired on 31 December 2000, but Telenor's decission came ahead of this deadline.

The transaction, which is due to be completed during the first half of this year, possibly in January, will involve a total payment by BT to Telenor of about 2.5bn euros, according to Telenor.

This will include a repayment of loans from Telenor to Viag, the Norwegian company said.

Control gained in August

BT paid 6.65bn euros for 45% of Viag in August 2000 and added it to its existing 45% stake.

Viag Interkom is the smallest of Germany's four mobile-phone network operators, as well as a fixed-line business.

BT's move followed UK rival Vodafone's purchase of Germany's Mannesmann earlier this year.

At the time, the Viag deal appeared to be a break from policy for BT, which to date has acquired mostly a variety of small stakes in - rather than control of - telecoms companies across Europe.

BT's debt is seen topping 30 billion pounds early this year.