Joint Investment
BRITISH TELECOMMUNICATIONS PLC
5 August 1999
A live audiolink to the Toronto news conference for media
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BT ANNOUNCES INVESTMENTS WITH AT&T IN CANADIAN
TELECOMMUNICATIONS MARKET
BT and AT&T today announced that they have jointly made two
strategic moves in the £10 billion Canadian telecommunications
market.
The companies reached a final agreement to acquire jointly -
on a 50-50 basis - an approximate 33 per cent stake in Rogers
Cantel Mobile Communications for Cdn $1.4 billion (about £600
million). Rogers Cantel, a publicly traded subsidiary of Rogers
Communications Inc., is one of Canada's leading mobile operators with
about two million customers. It also runs a range of paging,
interactive messaging and mobile data services and had a turnover
of Cdn $1.1 billion (about £460 million) in the last financial
year.
BT and AT&T also announced that BT will acquire a nine per
cent stake in AT&T Canada by acquiring 30 per cent of AT&T's
current 31 per cent stake in AT&T Canada for Cdn$ 600 million
(about £250 million). The company operates local, long distance,
data and Internet services and had a turnover in the last
financial year of Cdn$1.3 billion (about £560 million) on a pro-
forma basis following its merger with MetroNet and others in June
1999.
Under the agreement, BT will participate in the second phase
of AT&T's previously completed merger agreement with AT&T Canada
subject to Canadian foreign ownership restrictions being
lifted. This would allow BT and AT&T to acquire the remaining 69
per cent of AT&T Canada on a 30:70 basis, with BT having a
maximum further funding obligation of Cdn $1.65 billion (about
£700 million) under the agreement.
BT and AT&T's two joint stakes in Rogers Cantel and AT&T
Canada respectively will be held through two separate
intermediate companies.
This is the second major joint investment by BT and AT&T
since the two companies announced their proposed US$10 billion
global venture last year and follows the companies' joint
investment in Japan Telecom announced in April this year.
As part of these transactions, AT&T and BT have entered into
agreements with AT&T Canada and Rogers Cantel which will
accelerate immediately the bundling and joint marketing of fixed
and mobile services for business customers, as well as deployment
of mobile office services. In addition, certain facilities
sharing and construction cost sharing provisions will benefit
each of the companies.
Alfred T Mockett, president and chief executive of BT
Worldwide, said: 'Rogers Cantel and AT&T Canada represent a
significant addition to our global family of alliances and will
enable BT to take an active part in the Canadian mobile and
business market.
'Today's announcements are consistent with BT's strategy of
concentrating on the fast moving, high growth areas of mobile,
Internet and data communications.'
'Rogers Cantel has more than two million mobile customers
and is well positioned to grow in the Canadian market which has a
market penetration of approximately 20 per cent.
'AT&T Canada is strongly focused on the business market. It
has a 20,000 kilometre fibre optic network and local access
facilities in the top 14 cities. It also owns one of the largest
Internet service providers in Canada with more than 165,000
customers.'
John D. Zeglis, AT&T president, said: 'Today's expansion of
our global partnership with BT will help bring customers the
power of seamless global services backed by unparalleled
experience, extensive global reach and advanced networks in
Canada, the US and the UK, and globally through AT&T and BT's
global joint venture. With the AT&T investments in Canada,
customers there will have even better access to leading national
mobile and national fixed services, connected to the North
American and global reach of AT&T.
Charles E. Hoffman, Rogers Cantel's president and chief
executive, said: 'Rogers Cantel embarked on the first stage of
its relationship with AT&T in 1996 with a branding and
technology alliance that included the co-branding of our
products and services as Cantel AT&T. Today, we are
strengthening that relationship to ensure that our customers and
all Canadians will continue to have access to the best technology
and wireless services wherever they travel - across North America
and internationally.'
Upon the closing of the transaction, expected to take place
within seven business days, BT and AT&T will jointly hold an
economic interest of approximately 33 per cent. Rogers Communications Inc.
will have a 51 per cent economic interest with publicly
held shares representing a 16 per cent economic interest.
Notes to Editors
AT&T:
AT&T (www.AT&T.com) is the world's premier provider of voice and
data communications, with more than 80 million customers,
including businesses, government and consumers. AT&T runs the
world's largest, most powerful long-distance network and the
largest wireless network in North America. The company is a
leading supplier of data and Internet services for businesses and
the nation's largest direct Internet service provider to
consumers. AT&T also provides local telephone service to a
growing number of businesses.
About BT:
BT is one of the world's leading providers of telecommunications
services. With a market capitalization of more than 60 billion
pounds sterling, it is one of the largest private sector
companies in Europe. Its principal activity is the supply of
local, long distance and international telecommunications
services and equipment in the UK, serving 28 million exchange
lines. International direct-dialled telephone service is
available to more than 200 countries and other overseas
territories -- covering 99 per cent of the world's 800 million
telephones. BT is expanding its presence overseas rapidly and has
operations in more than 30 countries worldwide, with joint
ventures in the Republic of Ireland, France, Switzerland, Spain,
Germany, Italy, the Netherlands, Sweden, Japan, Hong Kong,
Singapore, Malaysia, Korea, India and Latin America.
Rogers Cantel:
Rogers Cantel is Canada's largest mobile company serving more
than two million customers from coast to coast. In 1998 the
company had a turnover of Cdn$ 1.1 billion (about £460 million),
a loss before tax of Cdn$75 million (about £30 million) and net
assets of minus Cdn$ 620 million (about minus £260 million).
Marketed under the co-brand Cantel AT&T, Rogers Cantel provides
a complete range of wireless solutions including cellular, paging
and interactive messaging, digital PCS and wireless data
services. The Cantel AT&T network currently covers more than 93
per cent of the Canadian population with Digital PCS service
available to more than 80 per cent of Canadians. Owned and
operated by Rogers Cantel Mobile Communications Inc., Rogers
Cantel is an 81 per cent owned subsidiary of Rogers
Communications Inc. Rogers Cantel Mobile Communications Inc
trades under the symbol of RCM.B on the Toronto, Montreal,
Alberta and Vancouver stock exchanges and under the symbol of RCN
on NYSE.
AT&T Canada:
AT&T Canada is Canada's largest facilities-based competitive
voice, data and Internet telecommunications provider. Created in
June 1999 from the merger of AT&T Canada Long Distance Services,
MetroNet Communications, Netcom Canada and ACC TelEnterprises,
AT&T Canada brings together the country's largest competitive
local exchange carrier, three of Canada's leading competitive
internet service providers, and Canada's pioneer in competitive
long distance. Deploying the most advanced fibre-optic networking
and digital switching platforms, AT&T Canada offers customers
across the country a full suite of local and long distance voice,
data and Internet services - with excellent customer service,
competitive pricing, and sales and service locations from coast-
to-coast.
On a pro-forma basis for 1998 it has turnover of approximately Cdn$ 1.3
billion (about £560 million)and losses before tax of Cdn$ 430 million (about
£180 million). After the merger in June 1999, it had net assets of Cdn $990
million (about £420 million) as of June 30, 1999. AT&T Canada is a public
company with its common stock traded on the Toronto and Montreal stock
exchanges under the symbol TEL.B and on the NASDAQ
National Market System under the symbol ATTC. Visit AT&T Canada's
web site, www.attcanada.com, for more information about the
company.