France Telecom sues Deutsche Telekom for billions

Italian merger effectively terminates alliance, says FT

Jilted phone giant France Telecom is claiming "several billion Euros" from Deutsche Telekom over the latter's wrecking of the pair's nice alliance. FT's claim translates neatly into a little over several billion dollars, and if the other member of the old triple alliance, US Sprint, cares to chime in, this could get expensive for DT. According to France Telecom: "The proposed combination between Deutsche Telekom and Telecom Italia, undertaken without any prior consultation with France Telecom, significantly alters the trust between the two partners and deliberately breaches the alliance. It entails as a consequence the termination of the agreements signed in 1998." DT's proposed Telecom Italia merger certainly materially alters the nature of its alliance with FT (which is somewhat different from, but not entirely unrelated to, the Global One alliance involving Sprint). The Register's take on DT's move is that it's some kind of corporate insanity (Register stock tip - never put any money into anything called Telecom Italia), and that no good will come of it. France Telecom has filed lawsuits with the International Court of Arbitration of the International Chamber of Commerce, and seems very cross indeed. ®

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