UPDATE: Europe to Lift Restrictions on Global One

The European Commission plans to lift restrictions on Global One SA, which will allow the European-American joint venture -- which has powerful but feuding partners -- to provide full telecommunications services across the European Union.

Before the limits on what Global One can offer are lifted, however, the Commission has given interested parties one month in which to comment or criticize the plan.

The plan is part of the European Commission's review of its 1996 decision authorizing Global One, a joint venture between Deutsche Telekom AG, France Telecom SA and Sprint Corp., to provide corporate telecommunications services. The new plan would let the venture offer data, Internet and traditional voice telephone to the public.

Market developments in the telecommunications sector motivated the Commission's review of the restrictions on the activities of the joint venture. These developments include the arrival on the market of other substantial competitors, such as the joint venture between British Telecommunications PLC and AT&T Inc., and the full liberalization of the EU's telecommunication market, which took effect on Jan. 1, 1998. Previously, state-owned national carriers had monopolies on much of Europe's public telecommunications services.

In a statement yesterday, the Commission noted that the BT/AT&T venture, which it approved in February, will have initial revenue of approximately 10 times that of Global One and will not be subject to the same restrictions.

The Commission plans to allow Global One to provide all telecommunications services on both a resale and facilities basis in all 15 EU member countries. It also will let the joint venture make the voice and data services of France Telecom and Deutsche Telekom available to third parties. In addition, France Telecom and Deutsche Telekom will be free to sell Global One services along with their own services, in one contract.

The plan to lift restriction on Global One, however, comes at a troubled time for the venture. France Telecom is suing Deutsche Telekom, claiming that the German company broke contractual obligations when it tried to merge with Telecom Italia SA earlier this year.

France Telecom said that Deutsche Telekom did not consult it before attempting the merger with Telecom Italia, announced in April. Though Deutsche Telekom's bid failed -- Olivetti SpA got the nod from Telecom Italia shareholders instead -- France Telecom has pursued its lawsuit. Apart from Global One, the French and German carriers last year also took a 2 percent stake in each other. France Telecom has insisted that the attempted Telecom Italia merger was a breach of contract regarding, at least, the stock-swap deal.

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More about AT&TBritish TelecommunicationsBT AustralasiaDeutsche TelekomEuropean CommissionFrance TelecomGlobal OneOlivettiSprintSprintTelecom Italia

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