Global One, a 3-year-old alliance with France Telecom and Deutsche Telekom, has yet to make money. It's unclear which of the European partners would control the venture if giant long distance company Sprint sells the stake, Reuters reported yesterday, citing unnamed people in the industry.
Sprint declined to comment, and Deutsche Telekom and France Telecom were unavailable. Sprint is being acquired by rival MCI WorldCom for $133 billion. Neither France Telecom nor Deutsche Telekom, each of which owns 10 percent of Sprint, wanted a piece of the new company, to be called WorldCom.
"France Telecom seems to have lost momentum while Deutsche Telekom is on a roll," said Eric Burkel, an analyst with Handelsbanken Markets, who rates France Telecom shares "buy." "France Telecom needs to prevail for damage control and to regain credibility regarding their international strategy."
Shares in France Telecom fell as much as 8 euros, or 6.45 percent, to 116 euros ($120.22) and were recently trading at 120.5 in Paris. In Germany, Deutsche Telekom shares fell 2.05 euros, or 3.06 percent, to 65, after trading as low as 64.4 euros. Shares in Sprint yesterday closed down 2.19, or 3.32 percent, at 63.75 in the United States.
Global One sells voice and data services to more than 35,000 businesses, including giant computer maker Hewlett-Packard and Coca-Cola, the world's largest beverage company. Its data network reaches more than 800 cities in 40 countries.
The partners had expected Global One to break even by 2000, though Deutsche Telekom said in August the venture wouldn't meet that target until after 2001. Gary Forsee resigned as chief executive of Global One in July, raising expectations the venture could fall apart.
Copyright 2000, Bloomberg L.P. All Rights Reserved.
Play video
There are currently no comments for this post.