AT&T, America Movil have own agendas

(Adds more analyst comment, updates share prices)

By Ritsuko Ando and Chris Aspin

NEW YORK/MEXICO CITY, April 2 (Reuters) - Top U.S. telephone company AT&T Inc. (T.N) and Mexican mobile phone operator America Movil (AMXL.MX)(AMX.N) have separate agendas as they jointly bid for a stake in Telecom Italia SpA (TLIT.MI).

AT&T wants to expand in Europe amid a decline in fixed-line services in the United States, while America Movil, owned by billionaire Carlos Slim, seeks to boost its supremacy in Latin America by taking over Telecom Italia's Brazilian operations.

The companies have offered about 4.5 billion euros ($6 billion), according to Reuters calculations, for a third each of holding company Olimpia, which is Telecom Italia's top shareholder with an 18 percent stake. San Antonio, Texas-based AT&T owns 8 percent of America Movil.

AT&T said the investment was part of effort to expand its global business and was key to serving corporate customers -- many of which do business abroad.

"We've been beefing up our capabilities with enterprise customers," said AT&T spokesman Michael Coe. "We're now a global company with multinational customers and we're investing organically and in partnerships such as this."

AT&T has relied on growth in consumer wireless and high- speed Internet subscriptions, but wants to build its corporate business, one of its weaker segments.

The company plans to spend more than $750 million in 2007 to expand its global communications network for corporate customers, an 89 percent boost over last year. The move for Olimpia would be a separate investment.

"We believe AT&T's international strategy has been to improve its enterprise segment by investing in local access and global fiber links," said UBS analyst John Hodulik.

But he and other analysts questioned whether the move would be effective, since Telecom Italia was a mobile player with weakening fundamentals.

Most said the investment -- which faces Italian government concerns about foreign ownership -- made more sense for America Movil, the largest Latin American mobile operator.

BACKDOOR ENTRANCE IN BRAZIL

Winning control of Telecom Italia is an easy backdoor entrance for America Movil to gain mobile assets in Brazil, analysts said.

America Movil, currently the No. 3 player in Brazil, was in talks and had bid for those assets last year, but was rebuffed.

Taking over Telecom Italia's Brazil operations, the second largest telecom in Brazil, would make America Movil the largest mobile phone company in Latin America's largest economy, ahead of Spain's Telefonica (TEF.MC).

"Rather than becoming a player in the Italian market, we believe that America Movil is searching for ways to buy Telecom Italia's Latin American assets," Merrill Lynch analyst Mauricio Fernandes said in research note.

"It is a new strategy and it can help them consolidate more in Latin America through Telecom Italia's Brazilian assets," said Andres Bezanilla, an analyst with brokerage Valmex in Mexico.

America Movil shares ended up 4.43 percent to 27.61 pesos on Monday, while its New York traded shares closed up 4.83 percent at $50.10. AT&T shares rose 0.08 percent to close at $39.46.

Standard & Poor's rating agency also saw Telecom Italia's Latin American assets as essential to America Movil's interest in the former state monopoly.

"The transaction could even lead to some industrial synergies, notably in Brazil," it said.

Slim, the world's third-richest man, created America Movil in 2000 by spinning off the mobile phone operations from telecommunications giant Telmex. Since then, the company has made a number of acquisitions, snapping up rivals in a multi-billion dollar spending spree.

America Movil now operates in 15 nations with more than 125 million clients.

"The Latam consolidation story makes sense, in our view, and supports AT&T's investment there, as well as the long term strategic relationship with Carlos Slim through America Movil and Telmex," Merrill Lynch analyst David Janazzo said in a note.

AT&T has said the move for Olimpia was contingent on America Movil's investment.

"We do have a long history of working with them and, because of that history, we think it's important for them to be involved," AT&T's Coe added.

((Reporting by Ritsuko Ando and Chris Aspin; editing by Andre Grenon; Reuters Messaging: ritsuko.ando.reuters.com@reuters.net; +1 646 223 6084)) Keywords: AT&T AMERICAMOVIL/

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