MCI WorldCom Targets Mobile Phones as Values Decline (Update1)
Bloomberg News
December 1, 1998, 9:36 a.m. ET
MCI WorldCom Targets Mobile Phones as Values Decline (Update1)
(Adds stock of wireless phone companies in 2nd paragraph.)
London, Dec. 1 (Bloomberg) -- MCI Worldcom Inc. Chairman
Bert Roberts said the U.S.'s No. 2 long-distance phone company
could buy a mobile phone service company in the ''next several
years'' as competition drives down the value of wireless phone
companies.
The shares in Omnipoint Corp. have slumped 70 percent since
peaking in April, while Nextel Communications Inc. stock has
slipped 37 percent. As more rivals crowd the market, mobile phone
companies will have to lower the prices they can charge customers
and increase the number of services on offer, Roberts said.
''Over time you will see us in that market,'' Roberts said
in an interview at the FT World Telecommunications conference.
''In the next several years there will be opportunities to buy
that would allow the impact on our earnings to be accretive,'' he
said.
MCI Worldcom is racing against its competitors to provide
customers with everything from local and long-distance phone
services to Internet access, high-speed data and wireless
services. While some of its biggest rivals like Sprint Corp. and
AT&T Corp. have invested billions of dollars to provide wireless
services, MCI Worldcom has largely shunned the market.
Roberts said MCI Worldcom is pushing hard to expand
internationally. He would like to see the company's share of the
world telecommunications market, which he said will be worth $1
trillion in 2000, to rise to more than 20 percent from about 3
percent now.
''That would put us in a very similar position to what we
have in the U.S.,'' he said.
Regulators Attacked
Roberts also criticized regulators in Europe and in Mexico
for their approaches to antitrust issues.
In Mexico, he said MCI is ''rethinking'' its investment
because regulators haven't done enough to open the market to
competition. MCI won't spend more in Mexico until the regulatory
environment is more favorable to new operators, he said, adding
that MCI's partner in the Avantel venture in Mexico will also
delay its $250 million investment until the regulatory issues are
improved.
In the European Union, Roberts said antitrust authorities
should not have forced MCI to sell its Internet business as a
condition for its takeover by Worldcom last year because the
Internet is a fast-changing medium that is impossible to control.
The combined company, even after the sale of the MCI business, is
the world's No. 1 carrier of Internet traffic.
''The concern was misplaced,'' Roberts said. ''Trying to
dominate the Internet is as fruitless as trying to nail jello to
a tree.''
Meanwhile, he said that MCI Worldcom has concerns about the
planned joint venture between AT&T and British Telecommunications
Plc and has filed these complaints with EU regulators. He said
the No. 1 U.S. and British telephone companies, both former
monopolies in their countries, still have the market power to
place a ''heavy hand on the water spigot'' -- or the direct links
between customers and phone services.
--Christine Harper through the London newsroom (44 171) 330-7982 |
