Clear's owners clear the air

By RICHARD BRADDELL utilities writer

Clear Communications is likely to remain in the British Telecom fold, either as a wholly or partly owned entity, despite its British owner's decision to focus on Japan and Western Europe.

Alfred Mockett, the chief executive of BT Ignite, the division responsible for global activities, said yesterday that whatever the outcome of a review of Asia Pacific activities, BT would keep an association with Clear.

BT's stance on Clear has been a matter of speculation since the British telco said it would slash debt from £30 billion ($102b) to £20 billion after heavy spending on European third-generation wireless licences.

But Mr Mockett said just because BT had set Japan and Western Europe as its focus, did not mean it would forsake everywhere else.

It would want to retain local partnerships that fed business into its global joint venture, Concert.

Enthusing about Clear's recovery from losses in the previous two years, Mr Mockett said its success after restructuring and the installation of a young new management team had turned the company around had to be celebrated.

"We are very pleased with the financial performance," he said, noting that Clear's reorientation towards a business market was providing three-quarters of revenue and driving double-digit revenue growth that outstripped the market's 4 per cent expansion.

The $200 million in new investment provided by BT in the March 2000 financial year had positioned Clear for strong growth in data, and investment on that scale would be repeated in the current year.

In the last month, Clear has signed a record $160 million worth of new contracts, including two large ones which are yet to be announced.

Mr Mockett said BT could take up any of a number of options with Clear, including retaining 100 per cent ownership, a partial sale to an investor or investors, or a partial management buyout.

"No matter what the outcome, we would ensure that Clear would have a secure line into BT in terms of ongoing access to our know-how, our technology, our research and development and product set."

BT's debt reduction is aimed at shoring up its A credit rating.

The one-third reduction target may be achieved through partial floats of core divisions operations such as BT Ignite, which is being readied for a partial IPO should conditions be deemed appropriate, or BT Wireless, or through sales or partial floats of other assets.

"Obviously we have a portfolio of assets in Asia Pacific and we will be looking to realise the value from [some] of that portfolio but at the moment we want to keep all our options open and realising value can mean a lot more than just selling out," Mr Mockett said.