British Telecom Reports Lower Profit, Forecasts Alliances

British Telecommunications, posting lower quarterly profit, said Wednesday that its $10-billion global joint venture with AT&T; Corp. will not be the last this year and that it expects to cut 5,000 to 6,000 jobs by year’s end.

BT, which announced the deal with AT&T; on Sunday, said its first-quarter pretax profit fell 18% to $1.2 billion after a leap in European start-up costs and surging interest charges.

BT said it shed 2,000 jobs during the quarter at a cost of about $65.7 million, and up to 6,000 are expected to be laid off during the full year. But BT said employee numbers had remained static at 121,000, as it continues to recruit in areas that are growing rapidly.

Referring to the AT&T; venture, Finance Director Robert Brace told reporters after a news conference, “It’s a good deal but it’s not the only deal we’ll do this year.”

Brace noted that BT has worked on about 50 deals. “Some don’t come to fruition because of price or because of a change in the market,” he said, then added cryptically: “Things are going to happen.”

Recent market rumors have linked BT with Germany’s Mannesmann in a possible joint bid for Italy’s Omnitel, the cellular telephone subsidiary of Olivetti.

BT is Europe’s most widely invested telecom carrier, with ventures in all major markets. Start-up losses, which opened a $128.1-million hole in quarterly profit, are expected to peak this year.