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MCI/Worldcom buys Sprint

Posted by ryuzaki0 on from the just-more-conglomeration dept.

Akatosh gave us the quick word - MCI/Worldcom has tendered an accepted offer to Sprint to purchase them. Another telco merger, this one is for 100$ billion dollars - beating out BellSouth. This is the largest corporate merger on record - and if it means I can get DSL at home, then more power to it.

6 of 114 comments (clear)

  1. This sucks by Anonymous Coward · · Score: 3

    I hear from my friends at AOL that AOL has people on both boards and now AOL is a majority shareholder of MCI/Worldcom/Sprint/UUNet/etc...

    according to their ads:
    "AOL *IS* the Internet"

    now.... hmmph...

  2. Hold on... by EggDye · · Score: 4

    Before people start rioting in the streets about this Worldcom/Sprint deal let's inject a bit of fact into the discussion:

    1) No final deal has been made yet. The gist of the article is that MCI/Worldcom have just upped their bid to $100 billion. There are two other competitors, Bellsouth and a German Telecom company that may still update their bids for Sprint.

    2) This deal would have to be approved by federal regulators, and this is not by any means a given. As the article states, Bill Kennard, chairman of the Federal Communications Commission, said, We cannot allow any merger to happen in this industry that turns back the clock on that competition."

    In my humble opinion, those are two pretty damn big IF's.

    1. Re:Hold on... by Geraint · · Score: 3

      Fair comments, but I think it's more of a done deal than you suggest.

      It's been in the offing for ages, and it's a nice fit particularly with the Sprint PCS wireless business. Bell South isn't a serious competitor given the regulatory hurdles, which aren't too bad for Sprint & MCI at all given their overlap. The European telecoms companies are all screwed up after the Telecom Italia fiasco and not seriously in the running.

      There's a good long story at the NYT that covers many of these issues and also an editorialat the Economist.

  3. Oh no!! by RobNich · · Score: 4

    When MCI and WorldCom merged, my company couldn't talk to anyone for a full 18 months!! We signed a three-year contract in April 1997, so we can't change services until next April. We've been taking bids and MCI seems to have the absolute worst pricing...
    But what about the MCI frame relay outage? A full week, and they continued to lie to their customers about it! "It'll be back up in an hour," when they knew they had lost a major piece of equipment!
    I'll go with *anyone* but MCI, and until today, that included Sprint!
    This is not good news for any company that would like to enjoy good service at a competitive price.

    The telecomm industry is weird (though no weirder than other industries, I'm sure...)-- here's a good example:

    Cincinnati Bell, formerly owned by "Bell" (along with Bell Labs, AT&T, et al), now independant. Owns Cincinnati Bell Telephone (CBT), a local telephone company. Also owns Cincinnati Bell Long Distance (CBLD), a long distance carrier competing in some cities (including Cincinnati) with AT&T.
    CBT has a relationship with AT&T, and shares switches with them. Also uses AT&T's wireless PCS network, providing national coverage. If you call AT&T for long distance service, the salesrep will hand you a card with Cincinnati Bell's logo on it, as well as AT&T's. CBLD bought IXE, and can now offer frame relay and dedicated long distance services in many major cities.
    If you call CBT, they'll recommend AT&T for LD service. CBT can't provide long distance service (though most Local Exchange Carriers can nowadays) because of their relationship with ATT. ATT can't provide local service correctly-- if someone wants to call you, they'll have to dial 1-NXX-NXX-XXXX, and pay long distance charges for a local call!

    WEIRD!

    --
    Hello little man. I will destroy you!
  4. Mafia Communications Incorporated by ewhac · · Score: 4

    <RANT>

    And exactly who is this merger supposed to benefit?

    Certainly not me. I just lost another long-distance company from which to choose. And it was one of the better ones. Now we're left with the whose ethics have been, at best, grey.

    GTE/Sprint laid down a brand new fiber network, anticipating bandwidth demands of the future. Meanwhile, MCI, you may remember, is the company that invented slamming (changing your long distance provider behind your back). They also invented "Friends and Family," marketed as a way for you to get marginally cheaper LD service, but was in reality a way for them to get priceless demographic data: A fully connected graph of who knows who.

    I fail to see why Sprint saw the need to sell out. Bigger is not better. Service is not going to get better. Phone rates are not going to get cheaper (in fact, I wouldn't be surprised if the "costs" of the merger were passed on to MCI/Sprint customers).

    My cynical nature suspect this deal was done just to make a few dozen rich executives even richer. Can someone help me understand how this is a good thing for me?

    </RANT>

    Schwab

    --
    Editor, A1-AAA AmeriCaptions
  5. we don't need fewer, bigger, stupid telcos by troutman · · Score: 4

    Hey, I even own some FON (Sprint) and PCS (Sprint PCS) stock, and I think this is bad idea. Set aside the long distance telephone service stuff (which is a whole other topic), and just look at the Internet side of it. A combined Sprint/MCI WorldCom would have control over way too much of the Internet.

    MCI Worldcom has UUNET, as well as what was ANS, and they provide network services to AOL. The run some of the MAEs. They have lots of connections and POPs outside the US, too. They are probably providing backbone services to about 25% of the Internet (they were backbone for 20.45% of the ISPs in north america according to the winter 98 boardwatch directory). They are just huge.

    Sprint IP Services is the backbone for another good chunk of the Internet -- probably another 25% (22.39% of the '98 NA ISP market per boardwatch). Sprint runs the New York NAP. They own a 28% stake in EarthLink, btw, (prior to the EarthLink/MindSpring merger). Post merger, EarthLink will have about 3 million subs, which they say will make them the #2 dialup ISP in the world.

    So, post-merger McISprintCom would be providing backbone services to something like 50% of the other Internet providers in the world, including AOL (12+ million subs), and will have a "broad business relationship" with EarthLink (3+ million subs).

    And this is just counting backbone connections for ISPs and some of the subs -- I imagine that in terms of actual flow of packets (total sent/recieved on the whole network, transit and peering arraingments) they would have a bigger percentage, because WorldCom/UUNET/ANS and Sprint also have (as far as I know) the majority of the really fast pipes (OC-48s and OC-192s) on the Internet, and the BFRs to go with them.

    Hmm, talk about a good company for the NSA to buddy up to for installing packet sniffers....

    Just as MCI was forced to sell of Internet business of MCI (to cable and wireless) before the MCI/WorldCom merger was completed, they will probably be forced to sell off some of their Internet provider holdings -- they question is, who will buy them, and what sort of new mess will that be?