BRUSSELS -- AT&T; Corp. and British Telecommunications PLC won European Union approval yesterday for their planned $3 billion joint venture after the biggest U.S. long-distance phone company agreed to reduce its U.K. operations.

AT&T; will sell its ACC long-distance phone unit in the United Kingdom and take steps to ensure that it does not use its 22 percent stake in Telewest Communications PLC to have an unfair advantage in the U.K. market, said the European Commission, the EU's executive agency.

AT&T; also plans to sell its stake in Mannesmann Arcor, a German phone venture with Mannesmann AG, the commission said.

The BT-AT&T; venture will provide voice, data and Internet services to multinational businesses and compete against rivals including MCI WorldCom Inc. and the Global One alliance between Deutsche Telekom AG, France Telecom SA and Sprint Corp. The steps AT&T; is taking for European approval won't hurt the venture's operations, analysts said.

"This was fully expected," said Anthony Ferrugia, an analyst at A. G. Edwards & Sons Inc. The venture will "improve AT&T;'s international position very substantially," he said.

The companies expect to complete the venture later this year, after getting approvals from the U.S. Federal Communications Commission and Department of Justice. The venture, which was announced in July, will have assets of $3 billion and annual sales of more than $10 billion.

Commission spokesman Stefan Rating said last month that the European regulator's "primary concern" was that AT&T; might have a decisive influence on Telewest, which competes with BT in the U.K. Telewest is the No. 2 U.K. cable TV company.

To alleviate the European Commission's concerns, AT&T; agreed to "create a greater structural separation" from Telewest, the commission said. It wasn't more specific.

AT&T; gained its Telewest stake, worth about $1.9 billion, when it bought U.S. cable company Tele-Communications Inc. earlier this month.

Pub Date: 3/31/99