Tuesday, October 12, 1999 Published at 13:36 GMT 14:36 UK
Business: The Economy
French giant targets alliance
Je ne regrette rien: Michel Bon of France Telecom
France Telecom is aiming to take over the crumbling European-US telecoms alliance, Global One.
Both Deutsche Telekom and France Telecom are scrambling to rebuild their international strategies, as their Global One alliance falls apart.
MCI Worldcom's takeover of Sprint has effectively destroyed the world alliance of the three carriers.
As yet, it is unclear how much the alliance would be priced at.
The troubled alliance had already been hit by Deutsche Telekom's bid to merge with Telecom Italia, who sought a white knight to fend off the hostile takeover bid from Olivetti.
Last week France Telecom retaliated by taking a 17% stake in E-Plus, Germany's third largest mobile phone operator.
Speaking to BBC News, Michel Bon, chief executive at France Telecom said: " A lot has changed, 1995 was an era of grand alliances...we just signed with Sprint and Deutsche Telekom. We did great things together. But that page has turned. We don't think we have wasted our time over the past four years."
He said that the company would be interested if the price was right. He also expected a resolution of the stalemate within "the next two months".
He expected one of the three partners to take over the company - and the others to rebuild.
Meanwhile France Telecom will continue to seek a US partner to replace Sprint, which is now in the Worldcom camp.
Mr Bon said: "We are looking for an alternative in the United States.... that could be a partnership, an acquisition...the creation of a subsidiary...or it could be a commercial relationship."
He said he was not annoyed at the decision by Sprint to merge with MCI Worldcom rather than stay with Global One.
What's next for Deutsche Telekom?
Since the European telecoms markets opened to competition in 1998, Deutsche Telekom's domestic market share has dropped, accentuating the importance of a strong international strategy. Deutsche Telekom chief executive Ron Sommer is expected to explain his strategy at the Telecoms 1999 conference on Monday.
Its purchase of UK mobile operator One-2-One failed to win over investors, who thought the price tag of £10bn was too high.
Some say the German company still hopes for a link up with Telecom Italia.
Deutsche Telekom could also be pressured by news that engineering group Mannesmann is set to spin off its mobile phone arm into a separate company. Some speculate that this is prompted by a desire for closer links with Vodafone Airtouch, its US partner.
Competition in telecoms has since spread to the Internet, as Deutsche Telekom's online rival AOL last week unveiled an aggressive advertising campaign starring the tennis champion Boris Becker.
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