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Mobile Sales Cut BT Debt

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LR Mobile News Analysis
Light Reading
12/31/2002

British Telecommunications plc (BT) (NYSE: BTY; London: BTA) has sold its 20.1 percent stake in Hong Kong mobile operator SmarTone Mobile Communications Ltd. (Hong Kong: 0315) to a property developer for about $132 million (see BT Sells SmarTone Stake). While this will help the telco's debt-reduction program, it does represent a bit of a loss for the carrier, which stumped up about three times as much to acquire the same stake in 1999. However, such deals have helped BT cut its debt pile from about £28 billion ($45 billion) in 2001 to just more than £13 billion ($21 billion) a few months ago. This "selling mobile-related stakes to reduce debt" malarkey is getting to be a bit of a habit for the British incumbent. This latest divestment is nothing compared with the walloping £2.5 billion ($4 billion) that BT will trouser for its stake in French operator Groupe Cegetel, which controls mobile carrier SFR. That French stake was the one that Vodafone Group plc (NYSE: VOD) was desperate to get its hands on, but which has ended up in the grubby paws of struggling French conglomerate Vivendi Universal (see Vodafone Loses SFR Battle). Let's hope that didn't spoil departing Vodafone CEO Sir Christopher Gent's Christmas. Honest. — Ray Le Maistre, European Editor, Unstrung

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