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To: Kayaker who wrote (43826)	10/8/1999 5:09:00 PM
From: Ruffian	Read Replies (2) \| Respond to of 152472

Third Force> Opinion: Third Force With Us By Judith Lockwood Last April, when the industry was abuzz about MCI WorldCom Inc. restarting 5-year-old acquisition talks with Nextel Communications Inc., Bill Esrey phoned Bernie Ebbers with an offer of nationwide wholesale wireless services, a proposal in which Sprint PCS CEO Andy Sukawaty immediately became involved. That call from Sprint Corp.'s chairman and CEO kicked off discussions culminating in MCI WorldCom's planned takeover of Sprint--a watershed for the wireless industry and telecommunications deregulation in general. The promise and potential profit of wireless already are making AT&T Corp. sing. But last week, for the first time, wireless was the catalyst for a mega-merger between primarily wireline companies with multiple voice and data interests. And, oh, what a muscled lever it is. Sprint PCS' enterprise value is no less than $56 billion, accounting for 43 percent of the $129 billion deal. Says Sukawaty, fatigued by a New York City weekend with bankers and endless yak about the merger: "We'll offer the connection to use things from your desktop not only in your home or office, but on the move as well. That's the vision for this and why it makes sense." He sees the proposed acquisition as a vote of confidence for bundling, national services and wireless in general, and he's right. With its fast-paced subscriber additions and increasing cash flow, wireless is taking its place alongside data, also a growth engine for the bigger vehicle of telecom. Voice minutes already are migrating geometrically from wireline to wireless. But it's the combination of wireless and data that's most powerful. Both the Sprint Corp. and MCI WorldCom wired networks currently carry more data than voice traffic. That trend is likely to occur eventually with wireless systems as well. Sprint PCS is readying itself. In September the carrier launched a wireless Web service on its expanding CDMA network, which has plenty of capacity. Plus, the technology easily can transition to third-generation services, something that Nextel's system, using integrated digital enhanced network equipment from Motorola, can't do. Add Sprint Corp.'s multichannel multipoint distribution services licenses for fixed delivery of entertainment and high-speed data to the Sprint PCS' affiliate, tower and mobile wholesale businesses. Then stir in MCI's WorldCom's SkyTel messaging unit. The result is a comprehensive menu of wireless offerings. Together with the combined company's wired services, the MCI WorldCom portfolio will be mightily competitive. Sukawaty sees the entity as a third force to the home: Wireless strength will help WorldCom face down the former Bell companies with their wireless subsidiaries and cable television operations, largely controlled by AT&T Corp. Even when long-distance becomes free or nearly free to attract contract data customers and LD operations plummet in value, MCI WorldCom will have a far better position in wireless and telecom in general than if it had purchased Nextel as a stand-alone. Sprint PCS should see a boost shortly: MCI WorldCom will begin reselling the company's wireless services, which could help the licensee reach planned break-even sometime next year. With the increased financial backing of a bigger parent, Sprint PCS also could extend its push into data services and consider faster international expansion. But most immediately, the Sprint-MCI WorldCom deal underscores the importance of the topics at a CTIA officers' retreat set for next weekend in Scottsdale, Ariz. Bundling, consolidation and globalization are on the agenda, just in time for the biggest living example since the Telecommunications Act of 1996. Sukawaty finds himself in the middle in more ways than just running Sprint PCS: now CTIA vice chairman, he moves into the chairmanship in June 2000, a few months before the acquisition is complete. E-mail: jlockwood@cahners.com