British Telecommunications (BT) on Friday played down top level talks with Japanese telecoms giant Nippon Telegraph and Telephone Corp but analysts refused to rule out that the companies were hatching a deal.
Since the talks were announced on Thursday, speculation has swept the market that BT, which along with its American partner MCI Communications has been openly courting NTT, might be on the brink of a link-up.
But a BT spokesman told Reuters: "That meeting was of no particular significance. We have regular contacts at that level and will continue to do so with NTT and others."
While BT is playing its cards close to its chest, some analysts speculated that the company, keen to get a foothold in the lucrative Asian telecoms markets via the world's biggest telecoms player, might hammer out a deal with NTT quite soon.
"I think that they are quite close to it," said John Tysoe, telecoms analyst at brokers SocGen Strauss Turnbull. But he added: "That is just instinct."
One analyst even said he had made a bet with a colleague that a deal would be signed or announced before the end of February. But others were split.
"You would expect in the next 12-18 months something to happen," said Chris McFadden, analyst at Merrill Lynch, adding: "If it happened tomorrow, we'd be all pleasantly surprised."
Another said he thought an imminent "memorandum of understanding" between the two companies was quite possible. But he added: "But in terms of any tangible, real tie-up, I would put it later in the year."
But analysts agree on two things. They dismiss as a "courtship ritual" NTT's statement that it might prefer to branch out into the global international market on its own.
They also believe that NTT will want to be calling the shots on any deal.
NTT may even stop short of a straight deal with BT and MCI's Concert alliance, preferring to link up with more than one global alliance. "On a selected basis, they may link up with as many as possible," said one analyst.
At present, there are three main alliances.
Apart from Concert, Deutsche Telekom, France Telecom and America's Sprint have formed Global One. The third consortium is WorldPartners, a loosely-knit organisation created by U.S. telecoms gaint AT&amp;T.
Members include Unisource, a venture of PTT Telecom of the Netherlands, a Swedish firm, the Swiss service provider, Spain's Telefonica and a stack of Asia-Pacific members such as Hongkong Telecom, Australia's Telstra and Korea Telecom.
BT's chief executive Sir Peter Bonfield is also travelling to Japan at the end of this month, part of a regular trip where he is likely to meet NTT executives, BT says.
BT has had an office in Japan for 10 years and already has a minor link with one of NTT's units, NTT Data, which distributes its Concert Internet Plus services.
It sent its first regional director to Tokyo this year in a move to highlight the growing importance of the area.
