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Global Telecoms Business
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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...