MS to take $5bn stake in AT&T

Telco follows post MediaOne Comcast deal with pledge to back Win CE

Microsoft is to buy into AT&T to the tune of $5 billion. In return, AT&T will put its not inconsiderable weight behind Windows CE, according to a Reuters report today. Some kind of Microsoft investment has been on the cards ever since it expressed it interest in ensuring Comcast, in which it also has a stake, won its battle with AT&T to acquire US cable company MediaOne. Here in the UK, MediaOne owns half of cellphone service One-2-One and a 29.9 per cent stake in local cable company Telewest. That share in Telewest will now come be transferred to Microsoft, in exchange for a heap of Microsoft shares. The agreement to back Windows CE expands an earlier deal between the two companies which saw AT&T license the OS for five million set-top boxes connected to high-speed digital lines. Now, all of AT&T's set-tops will use CE, effectively doubling the number of CE-based boxes the telecoms giant will sell. AT&T said it will also license software Microsoft is currently working on that will deliver e-mail and interactive services over cable television. ®

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