A statement attributed to British Telecom CEO Ben Verwaayen in a Belgian publication Thursday has set off speculation that the United Kingdom’s largest phone company is looking to either buy or partner with a mobile carrier in the United States.

Mr. Verwaayen is quoted in the Belgian financial newspaper, De Tijd, as saying that BT is looking at acquiring properties in Southeast Asia, the U.S., Germany, and France.

Last week BT introduced BT Corporate Fusion, a fixed-mobile convergence service targeted at large and multinational corporations (see BT Dials Phone Convergence).

Corporate Fusion integrates the mobile phone into the corporate IP network so the network can recognize the cellular device and switch its access automatically from the cell connection to the less expensive IP connection.

The telecom company has teamed with European-based carriers Vodafone and KPN to deliver the service to its corporate clients in those markets.

The glaring, missing piece for BT, which has a significant presence in the U.S. market, is a U.S. mobile property or partnership.

Shares of BT rose $0.90 to $49.35 in recent trading on the New York Stock Exchange.

One-Stop Shopping

“The concept of one-stop shopping still exists among large multinationals,” said Joe Nordgaard, director of wireless consulting firm Spectral Advantage. “Life is a lot simpler for them if you can pick up the phone and get your problems addressed with one phone call as opposed to 20.”

Whether BT partners or buys its way into the convergence sphere in its various markets remains to be seen, but the company is not showing its U.S. hand just yet.

“It is much better for us to partner because it allows us to remain agnostic about mobile carriers,” said François Barrault, president of BT International.

“If we own both the fixed and wireless units, we would prefer to use our own technology, and that can be limiting, but conditions are different depending on where we are in the world,” he added.

Technical conditions and economics vary from market to market so while BT has gone the partnership route in Europe, there are no guarantees that it will do the same in the U.S. or elsewhere in the world.

“Given the cost of competition in the mobile space and the length of time it takes to capitalize, build, and brand networks, my guess is that BT will partner in the U.S.,” said Mr. Nordgaard.

No Stranger to U.S.

BT is no stranger to the U.S. market. Its U.S. unit has been around for more than 17 years and once owned 20 percent of long-distance carrier MCI.

Also, Mr. Verwaayen, a 54-year-old Dutchman, was once a high-profile executive with Lucent Technologies in the U.S.

In the U.S., BT targets only multinational corporations and has no consumer business. If BT chooses to partner with a U.S. carrier, it will likely be limited to a choice of two: Cingular or T-Mobile.

Both Cingular and T-Mobile support GSM (global system for mobile communications) technology, while Verizon Wireless, SprintNextel, and Alltel all support CDMA (code division multiple access).

“GSM dominates business travel because of its ubiquity around the world,” said Mr. Nordgaard. “T-Mobile with its European roots would seem to be the logical choice, but it would probably fly up against BT’s relationship with Vodafone, so the choice may be Cingular.”

Contact the writer:CMedford@RedHerring.com

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