Don't Gloat Over the Carriers' Troubles

Kuehn, Richard A.
October 2004
Business Communications Review;Oct2004, Vol. 34 Issue 10, p66
Trade Publication
This article reports that AT&T Corp.'s second quarter revenues had fallen 13.2 percent, to $7.6 billion, and business revenues had declined 13 percent, to $5.6 billion. The wounded Ma Bell is now a potential take-over target from the likes of Kohlberg Kravis Roberts & Co., a firm specializing in leveraged buyouts. But it is far from the only carrier with ugly financials. MCI, fresh out of bankruptcy, reported a Q2 loss of $71 million. With a current market cap of around $5.6 billion, it too looks tempting and it has at least one suitor: Leucadia National Corp. has announced its intent to buy at least 50 percent of MCI's common stock. Leucadia, a holding company with businesses ranging from copper mines in Spain to Hawaiian hotels, purchased Wiltel out of bankruptcy some months ago.Business customers, of course, have been buying bundled service for 20+ years. The more traffic that can be aggregated into a contract, the bigger the discount. The problem, however, is that the size of the discount isn't the only relevant criterion in carrier selection.


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