Three Horned Threat

If this mega-alliance goes through, it could lock up a major segment of the European market. Deutsche Bundespost Telekom, Germany's state-owned phone monopoly, is the biggest international carrier in Europe and the second-largest in the world, with France Telecom, another national monopoly, right behind it. The two have a joint venture to service corporate customers; In June, they agreed to bring Sprint Corp. on board, paying $4.2 billion for a 20% stake in the U.S. long-distance carrier.

Sprint wins big. A distant third in the U.S., it gets an inside track on French and German traffic. And despite it's small size compared with its partners (Sprint had $11.4 billion in 1993 revenues, France Telecom $23 billion, Deutsche Telekom $35 billion), the three will split equally any European business outside of France and Germany. Finally, Sprint gets a 50% stake from traffic in the rest of the world. One catch. The U.S. is likely to delay the deal until France and Germany open their phone markets.

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