Upstarts profit from BT cutbacks

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Today is the start of BT's resurrection with the formal release of its demerger information - when the wireless business will be floated off as a separate arm and the rest of BT reinvents itself.

However, two announcements also made today show that while BT is retrenching to its UK, its future rivals are making the most of it.

BT is looking to offload its Spanish Internet arm, Arrakis, and the most likely buyer is Italian ISP Tiscali.

In the past two years Tiscali has expanded massively and ruthlessly - it's now one of the top three ISPs in Europe. It took over three ISPs here in the UK and has turned them into one Tiscali brand.

In Spain, it just bought Internet portal Inicia; now it's going for Arrakis and then it will do the same conglomeration trick over there. It has already done this as well in several other European companies.

And then, also in Spain, Vodafone is investing £11.3 million in an advertising campaign to boost its brand name - because it bought Airtel Movil a while ago and is changing it into Vodafone. Because it is building a worldwide brand.

Vodafone also bought BT's 20 per cent stakes in Japan Telecom and J-Phone in May. And last week, it topped this by buying more of both companies and gaining a controlling stake.

We could soon have a new European telco order; when BT does emerge feeling stronger and healthier, that the world has moved on.

Meanwhile the old big telcos like Deutsche Telekom and France Telecom are trying to run the show but their heavy burden of debt is slowing them down. ®

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