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Esrey: mega-merger propels global ambitions
01 November 1999
In October 1999 it was announced that the third biggest long-distance telco in the US, Sprint, would merge with MCI WorldCom, the number two player, in a transaction worth $129 billion. The new carrier, to be called WorldCom, will be a leading provider of global communications services. Sprint's chairman and CEO Bill Esrey talks to Mark Holmes about the merger.
Sprint built and operates the first nation-wide all-digital
fibre-optic network in the US. It is also a leading player in
advanced data communications services. The operator had been
considered a merger/acquisition target for more than a year. In
October 1997 Sprint announced that it was merging with MCI WorldCom
in a transaction worth $129 billion ($115 billion in equity and $14
billion in preferred stock). This concluded a hectic round of
activity, which saw BellSouth make a last ditch bid to merge with
Sprint.
A number of analysts had referred to MCI WorldCom's need to
acquire a wireless operator in the US with a national footprint.
One of Sprint's most attractive assets was its wireless operation,
Sprint PCS, which has almost one million subscribers.
Bruce Roberts, a telecoms equity analyst at Dresdner Kleinwort
Benson, talks about the importance of Sprint's wireless strategy:
"I think that wireless plays a very major...
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