PSIX up 26.5%, Takeover(?) Message Board

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Technology Stocks : PSIX up 26.5%, Takeover(?)

PSIX 85.22

-1.6%

11:18 AM EST

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To: bob zagorin who wrote (1479)	11/11/1997 4:43:00 PM
From: Sandie	Read Replies (1) of 5650

Bob: I just don't see PSIX as a potential acquiree of BT. BT is looking for a strong marketing and national presence within the US. One of the skills they had hoped to import from MCI was its proven marketing savvy and market-share winning ways over the last 15 years against BT's U.S. equivalent, AT&T. Keep in mind that BT is a recently de-regulated utility with 94% market share of the UK's local access lines, bloated labor costs, etc. It also has high hopes in the European market which will be de-regulated as of Jan 1, 1998. I would think PSI is not even on the radar screen. Yes, Sprint is in many ways even more attractive than MCI as it has a very large LEC business. But Sprint is tied up in the Global One alliance with FT and DT. In fact, I would guess that Sprint was BT's first choice and MCI second, but just a guess. Perhaps a Global One/BT alliance with BT effectively bringing over the Concert business? If you really wanted to get wired into the US telecom market why wouldn't you ally with an RBOC (or maybe GTE) rather than an IXC? BT already got burned in the costly fiasco of MCI's attempted entry into the US local market. Maybe this tme it would prefer to get closer to the source? How about BT/Cable & Wireless... a fellow Brit and 5th largest LD provider in the US? Ebbers at Worldcom has already said he doesn't want the residential LD business (the regulators will make him pay for that remark). Might he sell it to someone? BT/C&W/MCI residential? Ah, the mind spins at the permutations. Two interesting partners would be BA/Nynex with their huge Northeastern/multinational customer base (a lot of Eurpoean toll traffic) or maybe BellSouth with a big international cellular business. Again PSINet is too small to be on BT's strategic plate any time soon.

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