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BT, Vodafone in swap talks
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January 2, 2002: 6:37 a.m. ET
Report: Telecom giants to swap $4.4 billion in European assets
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LONDON (CNN) - BT Group and Vodafone have held inconclusive talks to swap $4.4 billion in assets to strengthen their presence in continental Europe, a report said.
BT is considering handing Vodafone its 26 percent stake in Cegetel, France's second largest mobile operator, in exchange for Arcor, Germany's second largest fixed-line business, the Daily Telegraph said on Wednesday.
Such a deal would enable BT to challenge Deutsche Telekom's dominance of the German phone market.
The BT stake in Cegetel would give Vodafone a 41 percent holding in the owner of mobile operator SFR. A further buy of the 15 percent Cegetel stake from U.S.-based SBC Communications would then give Vodafone both control and a larger stake than 44-percent owner Vivendi Universal.
BT (BT-) declined to comment on the report, while a spokesman for Vodafone (VOD) told CNN that talk of an asset swap is "just speculation."
Last week, Reuters reported Vodafone and Deutsche Bahn, a minority shareholder in Arcor, were close to an agreement that would allow the world's biggest mobile phone operator, Vodafone, to sell or float its 74 percent stake in Arcor.
BT confirmed several weeks ago that it wanted to get out of Cegetel.
But the Telegraph quoted a source close to BT as saying that while such a deal might have made sense last year, BT's retrenchment to Britain to help bring down its debt meant another continental holding was less likely now. 
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