BT, Britain's biggest biggest telephone group, whose transatlantic strategy was left in tatters after a failed merger last year with America's MCI Communications Corp, said the new 50:50 joint venture would be completed within 12 months.

The deal between BT and AT&T is the latest move in a fast-evolving international telecoms market driven by new technology and the needs of multinational customers.

In an attempt to capture the lucrative business of high-spending multinationals, BT and AT&T are pooling international assets into a new company which will have around 5,000 employees and annual revenues of more than 10 billion dollars in the first full year.

Operating profits of around $1 billion in the first year are expected, growing at 15 to 20 per cent per year. The venture wouldcontribute to both BT and AT&T's earnings from day one, the groups said in a joint statement issued in London. ``Through the venture BT and AT&T aim to be the undisputed leaders in the fast-growing global communications services market,'' they said.

The new retail and wholesale business, which has yet to be named, will be chaired by BT's chairman Sir Iain Vallance and will invest $1 billion dollars per year to build a global telecoms network to carry their shared international traffic.

In a related but separate development, the two companies said they plan to invest a total of $1 billion dollars in US. Businesses involved in high technology and emerging communications markets.

Analysts had expected BT, which has been in talks with a string of US operators, to hinge fresh deals around its current international alliance with MCI, called concert.

AT&T has also been actively pursuing potential international partnerships. The US giant is part of the international worldpartners alliance, linking Japan'sKDD, Singapore Telecom and the Unisource European alliance.But because of conflicting interests, AT&T said it would now exit Unisource by mid-2000. The world partners alliance will not be extended beyond 1999.