Businessweek Archives

Three Horned Threat


Special Report: TELECOM TITANS

THREE-HORNED THREAT

If this mega-alliance goes through, it could lock up a major segment of the European market. Deutsche Bundespost Telekom, Germany's state-owned phone monopoly, is the biggest international carrier in Europe and the second-largest in the world, with France Telecom, another national monopoly, right behind it. The two have a joint venture to service corporate customers; In June, they agreed to bring Sprint Corp. on board, paying $4.2 billion for a 20% stake in the U.S. long-distance carrier.

Sprint wins big. A distant third in the U.S., it gets an inside track on French and German traffic. And despite it's small size compared with its partners (Sprint had $11.4 billion in 1993 revenues, France Telecom $23 billion, Deutsche Telekom $35 billion), the three will split equally any European business outside of France and Germany. Finally, Sprint gets a 50% stake from traffic in the rest of the world. One catch. The U.S. is likely to delay the deal until France and Germany open their phone markets.


Steve Ballmer, Power Forward
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus