Deutsche Telekom and France Telecom have reduced their planned cross shareholding amid EC scrutiny.
The telcos originally wanted to swap shareholdings worth between seven per cent and eight per cent of their capital, but have now reduced this to between two per cent and three per cent.
The EC is investigating the proposals which includes the companies? respective chairman sitting on each other?s board.
Said one company insider: ?The amount of cross-shareholding is still under discussion. But it will be less than the anticipated seven per cent to eight per cent. It is more symbolic. If we share two per cent or three per cent it does not influence the structure. This issue has still to be filed with the commission.?
There are no plans to merge the two telco giants because ?the French government would not tolerate Deutsche Telekom taking over France Telecom,? said the source.
The two companies' collaboration would involve activities outside Germany and France, including their Italian joint venture, Wind, and programmes in Spain, the Netherlands and elsewhere.
However in some projects, financial controllers at Deutsche Telekom take a different line. For instance Deutsche Telekom pulled out of a Netherlands mobile venture because of the low rate of return but retained the option to return in the future, said the source.
The liberalisation of telecoms at the beginning of the year means some of the competition conditions imposed on Global One, the two telcos' joint venture with Sprint of the US, should be reviewed, he said.
The two companies are expected to complete legal checks of their plan before it is filed with the Commission in July.
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