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German, French Telecoms Cautious on AT&T Report

November 8, 1993

BERLIN (AP) _ AT&T is talking with the national telephone companies in Germany and France about setting up joint marketing ventures but the companies Monday declined to say whether any deals were imminent.

Such links among major U.S. and European telecommunications companies have been seen for some time as natural but the partnerships are only now starting to be formed.

In June, British Telecommunications PLC invested $4 billion in MCI Communications Corp., the second-biggest U.S. long distance company.

Communications Week International, in its latest edition, reported AT&T had drafted a memorandum of understanding with Deutsche Telekom, the German state- owned telephone company, and France Telecom, which is also state-owned.

France Telecom spokesman Bruno Janet said in Paris, however, the report was premature. ″The only thing I can say is we are discussing with many potential partners, including AT&T,″ Janet said.

He said the German and French companies don’t want to go alone outside Europe and so were looking for partners in the Americas and the Pacific.

Deutsche Telekom spokesman Klaus Czerwinski said the company was looking for ″strong partners″ but said there was nothing concrete to report about progress with AT&T or others.

An AT&T spokesman in the United States declined comment.

The German and French companies formed an alliance last year called Eunetcom to market global telecommunications services.

AT&T is already working with Deutsche Telekom and the Dutch telephone company to build a modern telephone network in Ukraine. AT&T is a major supplier of optical fiber equipment for Deutsche Telekom’s modernization work in the former East Germany.

Last week, Deutsche Telekom, Ameritech Corp. of Chicago and Cable and Wireless PLC of Britain joined in a bid for 30 percent of Hungary’s state telephone company.

Europe’s telecom companies will be deregulated by 1998 and that is also expected to spur alliances.

Just this weekend, Germany’s main political parties agreed to turn the national postal and telecommunications monopoly private.

″We expect privatization will lead to more flexibility for our activities on the international level,″ Czerwinski said.

The general plan is to divide the monopoly into three arms - the post office, telecommunications and the postal bank - and convert them into shareholder-owned companies.

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