Hopes rise for green light on phone alliance

Date: 23/05/1996

By Tim Jones

UNISOURCE and AT&T Corporation hope the full merger of most of their EU and Swiss operations will open the way for Commission clearance of their previous link-ups.

In mid-May, Unisource (an alliance of the Dutch, Swedish, Swiss and Spanish telecoms operators with equity participation from AT&T and Singapore Telecom) and AT&T agreed to merge their European operations.

The new company - AT&T-Unisource Services - will be 60&percent; owned by Unisource and 40&percent; by AT&T, with 5,000 staff and an annual turnover of around 800 million ecu.

A green light for the alliance, which is designed to take on the other world-wide link-ups, Global One and BT/MCI, must come from the Commission.

But Competition Commissioner Karel Van Miert has shown himself reluctant to clear the formation of these mega-carriers without squeezing the maximum number of concessions from all the participants.

He has already used his powers of approval of the 'Atlas' venture - the European arm of Global One involving France Télécom and Deutsche Telekom - to prise open parts of the German and French markets. The alliance has still not been formally cleared.

Unisource has had similar problems with the Commissioner and his services.

On 29 September last year, the firms involved notified the first AT&T/Unisource link-up, known as 'Uniworld', to the Commission, along with the initial involvement of Spanish operator Telefonica in the venture. This second notification was amended on 4 March to take account of the full merger of Telefonica's data transmission and business services activities into the alliance.

Since the original submission, the Commission has been looking into the web of alliances and has informed the parties of its concerns about access to the US telecoms market for European competitors.

While some telecoms analysts have wondered why AT&T and Unisource merged their activities while they still have no regulatory clearance for their existing services, the firms take the opposite view.

“By enlarging the venture to involve all our services, we have created a greater critical mass,” said an AT&T official. “It will bring to the market a player who will make the whole area more competitive.”

AT&T-Unisource Services will combine the firms' research and development, create common network methods, billing and customer services, and combine liberalised areas of voice telephony and data services for big business.