Financial Times:
I have to wonder about GTE. If they'd won their bid for MCI, would their actions have created a monopoly?
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FRIDAY MAY 15 1998ÿÿTelecomsÿ
WorldCom/MCI merger on track
By Michael Smith in Brussels
Telecommunications companies WorldCom and MCI said on Thursday they expected to implement their planned merger before the autumn and that it was unlikely regulators would place "onerous conditions" on them.
Senior executives of the two companies were speaking at the conclusion of two days of regulatory hearings in Brussels where the European Commission is investigating the merger amid claims the alliance would restrict competition in the supply of internet services.
Although WorldCom and MCI are both based in the US, they need regulatory approval from the authorities in Europe, where they have a large business, employing 3,000 people.
The companies' rivals, including GTE, charge that the business created by the $37bn merger would supply between 40 and 60 per cent of the internet backbone, the trunk network over which internet service providers transmit information.
However, WorldCom and MCI say that the best measure of internet access share is revenues and on this basis they have between 19 per cent and 21 per cent worldwide, less in Europe.
John Sidgmore, WorldCom chief operations officer, was unable to discuss the hearings in detail but said he did not think the companies lost ground.
"We think we will be merged before the end of the summer."
However, GTE, whose representatives attended the hearings, said it was pleased with the proceedings and that it was confident the antitrust authorities would conclude the merger was anti-competitive.
The European Commission has been co-operating closely with the US justice department to try to avoid conflicting conclusions on the merger.
It has until mid-July to make a decision under an EU timetable; the US investigation has no formal deadline.
Brussels rarely rules against mergers, although it sometimes orders divestments of parts of businesses as a condition of approval.
However, MCI and WorldCom argue that their market share is low and falling in Europe, and that competition is growing - particularly from the large established telecoms operators.
Fred Biggs, MCI chief engineering officer, said: "There are no customers, no true users, who came out against the merger.">>>> |
