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To: Sector Investor who wrote (506)	11/10/1997 3:27:00 PM
From: Maverick	Respond to of 1629

MCI accepts WCOM, PArt II Any deal would require approval from government regulators. The warring bids had seemed lavish for MCI, which grew from a startup mobile radio company more than three decades ago to become the fiercest challenger to AT&T Corp.'s once-solid monopoly on long-distance phone service. But the company has a unique position in a business that has undergone enormous regulatory and technological changes the past two years. A federal law intended to force more competition in telecommunications has touched off a spate of attempts by the industry's biggest players -- not all successful -- to buy their way into each other's businesses. MCI, more than other players, is in a unique position to take advantage of those changes, particularly new opportunities in local markets. MCI has been spending billions to build local networks of fiber-optic cable to handle calls in more than two dozen cities so far. That contrasts with plans by No. 3 long-distance company Sprint and AT&T to lease lines from local phone companies and then resell them to customers. MCI also is a leader in selling long-distance service to large companies and currently gets more than half of its revenue from big businesses. It has made MCI enormously attractive to companies such as GTE, a hybrid local and long-distance company, and to WorldCom. Both are attempting to expand into a range of communications businesses to take advantage of the regulatory reform. Under the agreement, Roberts will become chairman of MCI WorldCom, and Ebbers will be president and chief executive. ''We have aligned ourselves with a management team and employees who share our entrepreneurial spirit and continue to pioneer competition in our industry,'' Ebbers said. WorldCom is counting on big cost savings to make the deal worth it. It wants to slash $2.5 billion in costs in 1999 and $5.6 billion three years later. Another $2 billion a year would be saved in capital spending. British Telecom still holds 75.1 percent of Concert Communications Services, a global telephone joint venture it created with MCI. British Telecom has an option to purchase the remaining 24.9 percent of the venture, but said it was not sure whether it would exercise that option or try to work with WorldCom. The company would not disclose the price it would have to pay to get all of the venture. ''This agreement clearly gives an immediate benefit to our shareholders and retains both BT's ability to meet the needs of customers and the flexibility to pursue an aggressive global strategy with a strong U.S. presence,'' said the British Telecom chairman, Sir Iain Vallance. British Telecom says it has been approached by several smaller U.S. telephone companies that might be up for sale but it would not identify them.