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Telecommunications industry

Global Telecommunications Market Consolidation: MCI WorldCom Forms Largest Carrier

Strategic Insights

— 2 min read

The largest telecommunications acquisition in history has taken place with WorldCom's purchase of MCI Communications, forming MCI WorldCom Inc. The combined entity, led by Bernard Ebbers, will control about a quarter of the $70 billion U.S. long-distance market and offer a package of telecommunications services in 17 countries. This new carrier will be well-positioned to compete with global telecommunications powerhouses like British Telecommunications PLC, France Telecom SA, and Deutsche Telekom AG. The acquisition will also remain the top carrier of Internet traffic, the fastest-growing portion of the industry.

Key Takeaways:

  • MCI WorldCom Inc. has been formed through the $47 billion purchase of MCI Communications Corp. by WorldCom Inc.
  • The combined entity will control about a quarter of the $70 billion U.S. long-distance market, second only to AT&T Corp.
  • MCI WorldCom will offer a package of telecommunications services in 17 countries and remain the top carrier of Internet traffic.
  • The company will compete with global telecommunications powerhouses like British Telecommunications PLC, France Telecom SA, and Deutsche Telekom AG.
  • Proffitt's Inc. has agreed to buy New York-based Saks Holdings Inc. for an undisclosed amount.
  • MediaOne Group Inc. has agreed to buy part of SBC Communications Inc.'s 9.7 percent stake in TeleWest Communications PLC for up to $405 million.

Statistics:

  • $47 billion: The purchase price of MCI Communications Corp. by WorldCom Inc.
  • $70 billion: The size of the U.S. long-distance market, of which MCI WorldCom will control about a quarter.
  • 17: The number of countries in which MCI WorldCom will offer a package of telecommunications services.
  • $2.25: The price per share at which MediaOne agreed to buy part of SBC Communications Inc.'s stake in TeleWest Communications PLC.
  • $405 million: The maximum amount MediaOne will spend to buy part of SBC Communications Inc.'s stake in TeleWest Communications PLC.

Sources:

  • "WorldCom Inc. Completes Purchase of MCI Communications for $47 Billion" (Source: Dow Jones Business News, date not specified)
  • "Regions Financial Corp. Completes Acquisition of Etowah Bank" (Source: Atlanta Journal-Constitution, date not specified)
  • "Miller Industries, Inc. Authorizes Stock Repurchase Plan" (Source: PR Newswire, date not specified)
  • "Rockwell International Corp. to Report Charges and Operating Losses in Semiconductor Systems Unit" (Source: Business Wire, date not specified)
  • "Treasury Department Sells $13.05 Billion in Short-Term Bills" (Source: Bloomberg, date not specified)
  • "Proffitt's Inc. to Buy Dillard's Stores for $450-$550 Million" (Source: Bloomberg, date not specified)
  • "MediaOne Group, Inc. to Acquire Part of SBC Communications Inc.'s Stake in TeleWest Communications PLC" (Source: Business Wire, date not specified)

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