WCOM News -
MCI Worldcom CEO Announces 'All-Distance' Service, Open Access to All Network Services
WASHINGTON, Jan. 12 /PRNewswire/ -- The merged MCI WorldCom-Sprint will deliver on the promise of competition in the new millennium by rolling out its first ''all-distance'' service and offering open access to wholesale advanced services capacity, Bernard J. Ebbers, MCI WorldCom president and chief executive officer, said today. Speaking at the National Press Club in Washington, D.C., Ebbers made four specific announcements that demonstrate the company's commitment to consumers and competition:
* MCI WorldCom will offer an "all-distance" service to compete with
Bell Atlantic in New York, providing customers with a large bucket
of minutes that can be used for either local or domestic long
distance;
* MCI WorldCom will also step up competition for infrequent callers by
offering a nationwide product with no minimum usage or monthly fee;
* The merged company will design its broadband wireless network to be
capable of supporting Internet service provider choice by
implementing open access to its network wherever wholesale capacity
is available; and
* The new WorldCom will, within a year after the merger closes,
accelerate its deployment of broadband wireless in rural and under-
served areas.
''We will offer customers the benefit of real competition -- better prices, better quality and a full range of bundled, all-distance services and more innovation,'' Ebbers said. ''And the choice will not be between one monopoly or another. We will give it to them a third way. An open way. A competitive way.''
Telecom Act Accelerating Industry Changes
Ebbers pointed out that the rise of the Internet and wireless communications has fundamentally changed the way communications services are structured and sold. Distance -- a crucial variable in traditional telephone service -- is disappearing, he noted. And these changes have been accelerated by the Telecommunications Act of 1996, Ebbers said.
''The opportunity -- in fact, the imperative -- created by the Telecom Act, was to become a full service provider for the communications needs of customers. If you are not all-distance in this business, you won't go the distance,'' Ebbers said. ''That means providing local, long distance, international, data, Internet, wireline and wireless. All services -- all distances.''
MCI WorldCom and Sprint each looked at the options available for survival in the rapidly evolving telecom market and decided that joining forces gave them their best chance in facing off against strengthened ''Mega-Bell'' local monopolies and the AT&T cable broadband monopoly, Ebbers said.
Ebbers acknowledged concerns raised by critics that the merged company could create harmful concentration in the traditional long distance market but stressed that they ''rest on a perception that's way out of date.'' When compared with other major carriers in the all-distance market, MCI WorldCom and Sprint rank as numbers four and seven, Ebbers said.
Once other pending industry mergers are completed, AT&T and Bell Atlantic will still be larger than the new WorldCom, and SBC will be close behind, and that is only in the domestic market, Ebbers said. ''Competitors overseas are bulking up, and U.S.-based companies need to be strong enough to compete with them globally and on U.S. soil,'' he said.
Competition, Capacity will Drive Lower Rates
The new WorldCom will not be able to raise rates and sustain the increases simply because there is ''too much competition and too much capacity,'' Ebbers said. Even before the Mega-Bells entered long distance, the U.S. long distance market was one of the most competitive in history with more than 600 providers, fully 19 of them ranking in the Fortune 500, he said.
With the FCC last month authorizing Bell Atlantic to provide long distance service in New York and SBC this week asking the FCC for permission to do the same in Texas, it is clear that the Bells are moving aggressively into the ''all-distance'' market, Ebbers noted. ''When our merger was announced last fall some said that Mega-Bell entry into long distance was 'speculative,''' Ebbers said. ''Today there is no longer a shred of doubt that this very large train has left the station.''
The other reason the new WorldCom could not raise rates is the ''flood'' of transmission capacity being deployed by newer telecom players, Ebbers pointed out. All told, inter-city capacity has more than doubled since WorldCom announced its merger with MCI in 1997, he said. And of critical importance, the share of long distance route miles owned by carriers other than AT&T, MCI WorldCom and Sprint has grown exponentially-rising from roughly 5 percent in 1995 to 58 percent today, Ebbers noted.
MCI WorldCom (Nasdaq: WCOM - news) is a global leader in communications services with 1998 revenues of more than $30 billion and operations in more than 65 countries. MCI WorldCom's global networks provide high-capacity connectivity to more than 45,000 buildings worldwide. MCI WorldCom and Sprint have announced a merger agreement, which the companies expect to close in the second half of 2000, following regulatory and shareholder approvals. The new company will be called WorldCom. For more information go to wcom.com.
SOURCE: MCI WorldCom |
