Hi Ali:
The MSFT deal is for a preferred convert at a slight
premium to where the stock price was, so I am comfortable
with it. However, what worries me are the clever moves
by WCOM and NXLK. WCOM has now assembled a complete set
of assets: long distance fiber, wireless PCS, MMDS,
and local fiber. If CSCO can deliver on VOFDM, WCOM
will be there competing in every market and offering
every imaginable service as part of a bundle. NXLK
has also excellent strategic positioning with local
fiber, LMDS licenses and long distance fiber. I do not
understand yet McCaw's moves with either Iridium or
ICO, but I am afraid that when we will all understand
what he is up to, we will be impressed (I have been
wondering if he was not just gunning for the spectrum
rights without caring for the satellites). In face
of these two juggernauts, WCII has respectable long distance
and local fiber holdings, but it probably does not have
enough firepower to stay independent. In this context,
the conjecture SBC + WMB + WCII might make sense. The
bottom line here is that Bernie Ebbers, Craig McCaw,
and to some extent J. Nacchio with QWST + ARTT + USW
+ alliance with KPN, are all wheeling and dealing at
a more elevated level than either WCII or TGNT. I still
think WCII is a fine company and investment, but I would
be surprised to see it independent 2 or 3 years
from now.
Best regards,
Bernard Levy |
