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Friday, 20 April, 2001, 15:09 GMT 16:09 UK
BT 'to ditch AT&T venture'
Sir Iain Vallance
Chairman Sir Iain Vallance is considering Concert's future
Debt-wracked British Telecom is poised to sell its 50% stake in international corporate telecom venture Concert to its partner AT&T, according to press reports.

Concert was created three years ago to manage the telecom giants' large multinational clients.

But its performance has consistently failed to live up to expectations, with managers complaining that it is often competing for business with its owners.

BT and AT&T are now believed to be considering Concert's future.

A sale could help BT cut its 30bn debt mountain by 10% or more.

Recruitment freeze

A report on Business Week's website said no agreement had been reached on a sale.

But the magazine cited sources inside and outside the companies as saying serious negotiations were under way and that an announcement might be made as early as next month.

Business Week also said AT&T would take control of Ignite, BT's local networks on continental Europe.

In recent weeks, AT&T chief executive C Michael Armstrong has met BT chairman Sir Iain Vallance and chief executive Sir Peter Bonfield, it added.

Concert is understood to have frozen recruitment and the transfer of employees from other units until a decision has been made on its future.

Nail in the coffin

A British Telecom spokesman told BBC News Online that discussions about Concert's future were underway.

But he declined to comment on speculation that BT was on the verge of selling its stake in the company.

Last year, AT&T and BT cut their revenue forecast for Concert by 30% to $7bn, as the unit failed to live up to its initial promise.

BT's exit from Concert would be another nail in the coffin for the UK firm's international strategy.

In recent years, BT's prominence in global telecoms has been usurped by rivals such as France Telecom and Vodafone, which have both pursued aggressive growth strategies.

Unattractive

Analysts have been critical of BT's failure to win third-generation mobile phone licences in several markets in which it is currently present.

They also say BT should not have allowed rivals including Vodafone to gain control of foreign joint ventures in which both were shareholders.

Analysts say BT's stakes in these ventures are now unattractive from a shareholder point of view.

At the same time, BT has faced considerable shareholder anger for what some see as an unclear and unconvincing strategy for dealing with debt.

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See also:

20 Mar 01 | Business
The rise and fall of BT
21 Mar 01 | Business
Debt lifeline for BT?
26 Mar 01 | Business
Telecoms chiefs face debt crunch
25 Oct 00 | Business
Shake-up at AT&T
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