Here's another piece of info.
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Monday November 4 4:32 PM EST
More mega mergers expected in U.S. telecom market
By Nick Louth
NEW YORK, Nov 4 (Reuter) - The merger of MCI Communications Corp and British Telecommunications Plc BT.L will spur still more mega-mergers among U.S. carriers, seeking safety in size as markets coalesce.
"It's already going pretty fast. We have had four deals of over $10 billion since April. But we are going to get more," said analyst Guy Woodlief of Dean Witter Reynolds.
Regional Bells, GTE Corp , AT&T Corp and Sprint Corp will all have to re-examine their market strategies and see where they may be vulnerable.
There are plenty of vital assets, like state-of-the art nationwide networks, in the hands of carriers who don't have enough money to make the most of them, analysts say.
" Worldcom Inc is still definitely on the block," said David Goodtree, an analyst at consultancy Forrester Research.
WorldCom is in the process of buying business network provider MFS Communication Co Inc in a $13.3 billion deal. MFS had barely finished buying Internet access provider UUNet when the Worldcom deal was announced.
"Conventional wisdowm says GTE or Bell Atlantic Corp ) would buy WorldCom, but a dark horse would be Cable and Wireless Plc CW.L ," Goodtree said. C&W on Monday said it would build a transatlantic cable system with MFS.
GTE was a rumored bidder for MCI, while Bell Atlantic and Nynex Corp agreed to merge in April. None of them owns a national long distance network.
GTE already is offering long distance calling, and the other two plan to, once the legal impasse over U.S. telecommunications reform is solved.
With cable TV networks integrating with telephony, Tele-Communications Inc is a candidate, some say.
"Another company ripe for acquisition is TCI. They don't have enough cash to do what they want to do," said Goodtree.
He suggested that AT&T or Sprint would want to buy TCI. Sprint is already a partner with TCI and two other cable firms in a national venture called Sprint Spectrum to bundle local and long distance telephone, wireless and cable TV.
Concert, as the combined MCI/BT will be called, will be able to assert its strength fairly rapidly after the deal closes, expected in nine to 12 months.
"It clearly ups the competitive ante for the whole industry," said analyst Julie Kennedy of Goldman Sachs.
Concert will push harder into local markets, both through the MCI Metro venture it already has in major U.S. cities and through resale of regional Bell circuits.
"If BT is more prepared to take early losses than MCI has, you could see a renewed emphasis on local markets," Woodlief said, adding he expected to see marketing pushed harder.
AT&T will have to concentrate hard now it is looking eye-to-eye at a rival its own size.
"In one company (Concert) you have the resources of an AT&T and the marketing savvy of an MCI," said consultant Jeffrey Kagan of Kagan Telecom.
"Two years out MCI could take the top spot from AT&T domestically, which would have been unthinkable just one short year ago. Three years out you won't recognize this industry," said Kagan.
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Later.
Mark |
