Telefonica?s board is discussing future US partnerships, and the smart money seems to be on MCI. Analysts say that if Spain?s privatised telephone company chooses MCI, which is planning a $20 billion merger with BT to form the new Concert company, then the European telecomms industry will be restructured.
Equally, Juan Villalonga, president of Telefonica de Espa?a, acknowledged recently that Telefonica has four or five options on American partners, and he said that any US partnership would have to strengthen Telefonica?s significant presence in Latin America.
The most likely potential partners are MCI, AT&T, Bell Atlantic, GTE, Sprint and SBC. Telefonica refuses to comment, but analysts say apart from building a strong Euro-wide foothold through any MCI/BT partnership, Telefonica itself is an attractive prospect for its several suitors.
Its existing presence in Latin America via TISA, its international subsidiary is strong, and since AT&T is a keen player in Latin America, there could be difficulties and conflicts of interest between the two, both keen to build a competitive edge.
MCI is weaker in Latin America than AT&T, and arguably, a tie-up with MCI would be less fraught. BT is holding an extraordinary general meeting next week, seeking approval for the Concert merger with MCI. Telefonica is expected to have made its partnership decision by then, and BT?s shares rose recently on speculation that it might buy into Telefonica.
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