British Telecommunications (BT) said today it expected to write off £500 million sterling (euro 801 million) on investments including AT&T Canada in its half-year results.
BT also said it may incur substantial costs if it closes its Concert joint venture with US telecoms giant AT&T Corp. But it was unable to announce a decision on the future of the 50/50 venture, saying it was still in talks with AT&T.
Finance director Mr Philip Hampton said BT was unlikely to write off the entire £1.4 billion book value of its Concert stake.
Chief executive Mr Peter Bonfield said he would be disappointed not to have a decision on Concert by the end of the year. He said the September 11th attacks on the United States had put a decision back by a few weeks.
Shares in BT slipped 10 pence or 2.7 per cent to 363-1/2p by 9 a.m., going against the trend of a higher FTSE 100 index of leading British shares.
"The shares have sold off this morning on concerns about the Concert situation and the £500 million impairment charge," said Mr Nigel Hawkins, telecoms analyts at Williams de Broe.
Unveiling the prospectus for the demerger of its mobile phone business mmO2 Plc, BT said mmO2 would have listings in London and New York and was expected to enter the index of top 100 British companies on the London market.
Shareholders have to vote on the demerger, and if they approve the plans, mmO2 will start trading as a separate company on November 19th.
BT said mmO2, whose services includes Esat Digifone in Ireland, will be marketed under the O2 brand by spring next year.