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Concert hits wrong note
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February 20, 2001: 4:30 a.m. ET
Report: AT&T, BT in talks to salvage failing Concert joint venture
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LONDON (CNN) - AT&T and BT admit that Concert is failing and are attempting to salvage the joint venture, a report said on Tuesday.
AT&T, the No. 1 long distance phone company in the U.S., has suggested it take majority control of the 50:50 joint venture, and has threatened to quit if the new structure cannot be agreed.
"There is very regular contact over Concert because there is a feeling on both sides that we should be getting better value out of it," one source close to the negotiations told the Financial Times.
The report comes as both partners face investor pressure to improve their performance. BT (BT-A) admitted on Monday it had wasted $14 billion on buying third-generation cellular licences in Europe, while AT&T (T: Research, Estimates) recently reported a halving of fourth-quarter profits.
British Telecommunications, Britain's second-largest phone company, and AT&T attempted to revive the ventures fortunes last year by discussing whether pumping in additional assets through a full merger of their business services divisions would improve matters.
"We remain in active discussions with AT&T about the future of Concert and our relationship. We are disappointed by the severe margin decline that's affected Concert's revenue and profitability," Andrea Paradine, a BT spokeswoman told CNN.com.
AT&T blames Concert's lack of success on a lack of cooperation from British Telecom's partially-owned subsidiaries outside Britain, the FT said. Concert has failed to reach sales targets in Europe
Concert was set up in July 1998 to provide telephone and Internet services to multinational companies. The joint venture inherited 270 of BT's and AT&T's biggest clients.
BT recently revealed that underlying profit fell to £50 million ($70 million) in the three months to December from £58 million in the three months to September. Sales fell to £541 million from £836 million over the same period. 
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