Telcos say they stand behind Global One

Deutsche Telekom AG, France Telecom SA and Sprint have reaffirmed their commitment to their three-way Global One telecommunications alliance, responding to a news report which said that Global One would shortly be folded.

"We stand behind Global One," said Deutsche Telekom spokesman Hans Ehnert, who refused to comment specifically on a report in today's New York Times which claimed that Global One could shut its doors in as soon as six weeks.

According to the report, the move to close the venture was initiated by Sprint's chairman, William Esrey, after he sent a letter three weeks ago to Deutsche Telekom chairman Ron Sommer and France Telecom chairman Michel Bon. The letter suggested that the companies should meet to discuss possibly ending the partnership.

Sprint spokeswoman Eileen Doherty said she had seen no such letter. "Sprint is definitely standing behind the alliance. Everything is going along as it always has been, and we're looking forward to Global One turning a profit in 2001," she said.

Global One's new management team under chief executive Gary Forsee and the restructuring measures it has recently taken will help it to reach that goal, according to Deutsche Telekom's Ehnert.

Likewise, France Telekom spokesman Bruno Janet also reiterated the French carrier's stance in support of the alliance. It is clear from Global One's recent financial results, said France Telecom spokesman Bruno Janet, that the "restructuring is working". He declined to give further information.

In 1997, Global One reported revenues of more than $US1.1 billion. But it has long been a loss-making operation for its three partners and has been dogged by repeated rumours that it is in trouble.

Although it doesn't publish separate profit figures, rumours circulated in the German press in January that the alliance had incurred losses of more than $US809 million in 1998. At the time, Deutsche Telekom would not comment, but said that Global One's costs were high right now, because of the ongoing restructuring there.

At least one analyst gives Global One his vote of confidence. "Of late, our clients are much happier with Global One than they were 12 months ago," said Bernt Ostergaard, a director and telecommunications analyst at Giga Information Group in Copenhagen. Service and flexibility are two things that have improved lately, he added. "Overall, the alliance is performing much better, even though they aren't yet making any money."

Founded in 1995, Global One focuses on serving international corporate customers with telecommunications services around the globe. Global One has sales offices in 65 countries and more than 1400 points of presence outside Germany, France and the USA.

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