BT and AT&T have welcomed the European Commission's decision yesterday to clear their planned $11 billion alliance, but warned that they still need the green light from US regulators.
The companies announced plans last July to combine their international businesses, a move that prompted rivals such as Cable & Wireless to complain bitterly to the Commission.
But following the Commission's conditional approval, Cable & Wireless said it will take its fight to the US Department of Justice and the Federal Communications Commission, the two regulatory bodies still to approve the decision.
AT&T and BT in a joint statement said they welcomed the Commission's decision to back the 50:50 joint venture, even though they must first make a few concessions.
AT&T must sell long distance operator ACC Telecom, sell its stake in Mannesman Arcor in Germany, keep its 22 per cent stake in UK cable operator Telewest completely separate and must exit the Worldpartners carrier alliance.
"When we announced the venture last year we said that this new business aims to offer innovative and competitively priced services to global customers and carriers," said a BT spokesman. "Today is an important step towards that goal."
As to gaining approval from the US regulators, the companies issued an upbeat message.
"We expect these clearances later this year and look forward to launching the new company," the spokesman said.
Meanwhile, Cable & Wireless said it was surprised at the decision. "We believe the proposed alliance will have a detrimental effect on competition in the UK and international markets," said a spokesman. "We will continue to assist US regulatory authorities in their review of the venture."
The European Commission's investigation has concentrated quite heavily on the joint venture's impact in the UK and Europe. US regulators are likely to concentrate on the venture's strength in carrying international traffic between the US and the UK - estimated to be around 50 per cent of traffic.
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