EU outline its conditions for AT&T deal

A LINK between AT&T and a European consortium, which includes two companies bidding for a stake in Telecom Eireann, would be permitted by the EU if the US telecommunications giant would agree to open its domestic market.

Completion of the link by the Unisource consortium is of central importance to the bid lodged by two of its members, Telia of Sweden and KPN of the Netherlands, for a stake in Telecom. Access to AT&T's global network is a necessary element of the bid. The other bidder for the 35 per cent Telecom stake, Tele Danmark, has no established link to such a network and is thought to be seeking a partner which would give it access to one.

Sources close to EU Competition Commissioner, Mr Karel Van Miert, said yesterday the Unisource/AT&T deal would be cleared if AT&T would agree measures to open its market.

A letter has been sent to the US Justice Department asking AT&T to "be more flexible" regarding infrastructure interconnection rights for European telecoms operators other than the four concerned, the source said.

The four Unisource members are the telecoms operators in Spain, the Netherlands, Switzerland and Sweden.

"If AT&T agrees to open the market to telecoms operators - other than those with which it has an agreement, we will no doubt be in a position to clear the deal," the source said.

The Swiss, Dutch, Swedish and Spanish telecoms operators grouped in Unisource agreed with, AT&T to create a joint venture - Uniworld - which would offer advanced telecoms services. Both Unisource and Uniworld were being examined by the European Commission.

Commission sources said AT&T still has a dominant position on traffic between the US and the EU despite its claim that this was no longer the case.

According to Commission estimates, AT&T has 60 per cent of the US originated traffic between the two sides of the Atlantic.

The clearance of the Uniworld and Unisource joint ventures also depended on the willingness of Spain, one of Europe's largest telecoms markets, to open up its market for competition at the same time as most of its European partners, the source said.