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Wireless Cable Operators Face Uncertain Future Amid Sprint and MCI WorldCom Merger

Strategic Insights

— 1 min read

The Multi-channel, multi-point distribution system (MMDS) operators are facing a future of uncertainty as Sprint and MCI WorldCom gear up to merge, potentially changing the landscape for wireless cable operators. At stake is the fate of hundreds of MMDS operators, who could see their businesses disrupted by the new combined entity. Sprint and MCI WorldCom's acquisition of MMDS operators could mean lower bids and less competition for these companies, forcing them to sell out for bargain-basement prices.

Key Takeaways:

  • MMDS operators are likely to face reduced competition and lower bids for their businesses due to the Sprint and MCI WorldCom merger.
  • The merger could lead to a reduced number of MMS operators, with the combined entity potentially purchasing hundreds of smaller operators to fill out its service areas.
  • AT&T appears to have the upper hand in the competition for consumer broadband customers, with a larger footprint and a hybrid solution that sets it apart from its competitors.
  • MCI WorldCom and Sprint's decision to merge may not solve their problem of competing with AT&T in the broadband market, and they may be expected to continue acquiring MMDS licenses to expand their reach.
  • Steve Lancelotta, a partner at Rini, Coran & Lancelotta, suggests that Sprint and MCI WorldCom may buy more MMDS operators to fill out their service areas.
  • Erv Paw, a consultant at Phillips InfoTech, believes that the merger does not solve the problem of competing with AT&T in the broadband market, and that MCI WorldCom and Sprint need a larger footprint to compete.

Statistics:

  • 200-plus MMDS operators are expected to be affected by the Sprint and MCI WorldCom merger.
  • MCI WorldCom initially offered $408 million for Albany, N.Y.-based CAI Wireless in April.

Sources:

  • Elisa Modugno, "Wireless Cable Operators Face Uncertain Future Amid Sprint and MCI WorldCom Merger," Broadband Networking News, Fiber Optics News, and ISP Business News, 1999 (no exact date given)

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