US Sprint Reportedly Seeking Stake in Cable Across Atlantic

From Reuters

US Sprint Communications Co., hoping to expand its role in the international long-distance market, is negotiating to buy a stake in the first private telecommunications cable linking the United States and Europe, industry sources said Tuesday.

US Sprint hopes to acquire Private Transatlantic Telecommunications System Inc., a privately held company based in McLean, Va., that is building the transatlantic cable, called PTAT-1, in a joint venture with Cable & Wireless PLC, a British-based communications firm.

Analysts said the deal would significantly bolster US Sprint’s international presence.

US Sprint’s linkup with Cable & Wireless is a blow to New York-based Nynex Corp., which has sought for two years to buy a 50% stake in PTAT-1.


Earlier this month, U.S. District Judge Harold Greene rejected Nynex’s request for a waiver of the rules that restrict the Bell companies from offering long-distance services. Greene oversees the Bell companies as part of the 1984 breakup of American Telephone & Telegraph Co.

Nynex could not be reached for comment.

The domestic long-distance market is growing about 10% a year, but international calling volume is increasing at a rate at least twice as large.

Analysts said US Sprint, a unit of United Telecommunications Inc., would benefit by offering its customers connections to Britain and other parts of Europe through Cable & Wireless’ Mercury Communications subsidiary.


In exchange, Mercury’s subscribers would have access to the United States over US Sprint’s domestic fiber-optic network.

PTAT-1, the $600-million PTAT/Cable & Wireless cable, will carry voice and data calls in the form of laser-generated pulses of light on strands of glass cable laid across the bottom of the Atlantic Ocean.

It is the first transatlantic cable not built primarily by public phone companies and will compete with TAT-8, a system owned by AT&T; and state-owned phone companies in Europe, Canada and Australia. TAT-8 went into service in December.