NEW YORK, July 26 -- AT&T and British Telecom have announced a massive joint venture aimed at capturing the lucrative international corporate communications market and creating a new Internet system. The companies say the project is not a merger, and will form a separate company with about 5,000 workers generating an expected $10 billion in annual revenue and $1 billion in profits, growing about 15 percent a year after that. AT&T and BT -- each the largest telecommunications firms in their countries -- announced the deal in a turbulent period of mergers and acquisitions in the communications industry. AT&T is still digesting its $32 billion merger with cable company Tele-Communications Inc., and last week closed an $11 billion acquisition of Teleport Communications Group. BT tried to buy MCI for $24 billion, but was outbid by WorldCom, which paid $37 billion. The companies say they are trying to create jobs with the new company, which has yet to be named, but says some that overlap may need to be eliminated. BT chief executive Sir Peter Bonfield said, 'We've got the two greatest brands standing shoulder to shoulder and we think we're going to transform the global telecommunications industry.' AT&T President John Zeglis said, 'The merging of our international assets to form this global venture will enable BT and AT&T to deliver in a unique and powerful way the seamless global services our multinational customers need and want.' The giant firms will share 50-50 in the expenses. They are also splitting costs on another $1 billion deal investing in emerging U.S. high technology programs and telecommunications firms in emerging markets.
AT&T has annual revenues of $52 billion; BT of $26 billion. The companies are swapping no stock in the deal. The new firm will target three main areas: -- A global network for voice and data that offers telephone services to multinational corporations and other large customers. -- A global sales and service business aimed at corporate financial, oil and information technology firms. -- An international phone business offering low-cost communications for individual and business customers around the world. The two companies say the deal will require approval from various U. S. and European regulators, a process they expect to take less than a year. ---
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