strange the phone isn't on the web site?--------------ot
MCI WorldCom CEO To Take His Time On Wireless
CLINTON, Miss. (Reuters) - MCI WorldCom Inc. (Nasdaq:WCOM - news)'s chief executive told
shareholders Thursday the No. 2 U.S. long distance phone company is planning to get into the wireless
phone business, even though it is not taking immediate steps in that direction.
''I guess we do not feel that we need to be in wireless at this point in time strongly enough that we need
to go out and do something that affects dilution,'' CEO Bernie Ebbers told 350 shareholders at the annual meeting. But he
added, ''That does not mean we intend to stay out of wireless.''
Hosting the meeting at the company's new headquarters building Mississippi, Ebbers pointed out that the company recently
bought some spectrum in the MMDS (multichannel multipoint distribution service) arena and is looking at other acquisitions. ''I
think WorldCom will definitely be in the wireless business at some point in time. But it's a judgement call on when you need to
make that jump and this is not the right time,'' Ebbers said.
MCI WorldCom ended talks to acquire wireless phone company Nextel Communications Inc. (Nasdaq:NXTL - news) and
earlier this year backed away from bidding for AirTouch Communications Inc. .
MCI WorldCom lacks a wireless phone business at a time when more calls are being made on wireless phones, and wireless
customers in the United States surged 25 percent to 69.2 million last year, according to the Cellular Telecommunications
Industry Association. MCI WorldCom's main rivals, AT&T Corp. (NYSE:T - news) and Sprint Corp. (NYSE:FON - news)
have aggressively built their wireless operations.
In an interview before the annual meeting, Ebbers said that MCI WorldCom has looked at some wireless companies with
national networks. He said that piecing together a network with regional wireless companies would take a ''tremendous amount
of time,'' and likely be prohibitively expensive.
Though it is still cool to wireless phone service, MCI WorldCom has been competing with Sprint to buy wireless cable
companies with MMDS spectrum. The spectrum would allow the long distance companies to transmit voice and data services
directly to customers' homes and businesses and allow them to bypass the Baby Bells' networks.
MCI WorldCom recently agreed to acquire MMDS companies CAI Wireless Corp. and Prime Cable. The company may
pursue other similar acquisitions to expand its reach to about 70 percent of the United States, Ebbers said.
''Our goal initially was to get to 70 percent (coverage of the U.S.) and right now we're a little bit above 50,'' Ebbers said.
Competition for the properties has sent the prices of the companies soaring, Ebbers said.
MCI WorldCom will use the spectrum to connect directly to small and medium-sized businesses. The spectrum has limited data
transmission capability so it would not be used to serve large companies, Ebbers said.
''We build it out and we'll use it as an access vehicle to small and mid-sized businesses...in areas where we don't have our local
facilities reaching out as far as we'd like,'' Ebbers said.
Ebbers said the company's consumer Internet operations were growing ''slowly.'' Tim Price, president of MCI WorldCom
Communications, said the operations were profitable and customer retention has been very strong.
Ebbers does not see the company going into cable television, even though rival AT&T has made aggressive cable acquisitions
and is set to become the nation's largest phone and cable company.
MCI WorldCom recently considered helping some allies in bidding for MediaOne Group Inc., which AT&T agreed to buy for
$58 billion. Ebbers joked, ''We did try to indicate an interest in MediaOne just to see if we could get AT&T to pay more.''
Even though MCI WorldCom has no interest in entering the cable television business, he said he backed efforts by America
Online Inc. (NYSE:AOL - news) and other Internet companies to make cable companies' networks open to competitors.
AOL's Chairman Steve Case sits on MCI WorldCom's board.
At the meeting, shareholders approved an increase in the company's outstanding stock to 5 billion shares from 2.5 billion,
approved the 1999 stock option plan and approved the election of the company's 17-member board of directors.
Ebbers said Thursday the company's board would likely discuss the possibility of a stock split following the company's annual
shareholder meeting, but he said he did not favor such a move at this time.
The company said its capital spending for 1999 is expected to be about $6.5 billion to $7.0 billion. At its June 2 analyst
meeting in New York, MCI WorldCom said it would outline details of plans to spend about $1 billion in proceeds from recent
asset sales in high-growth areas of its business.
Earlier Stories
MCI WorldCom CEO Says He'll Take His Time On Wireless (May 20)
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