Newspaper article The Florida Times Union

No. 2 May Bid Again to Enter Wireless Market

Newspaper article The Florida Times Union

No. 2 May Bid Again to Enter Wireless Market

Article excerpt

NEW YORK -- Will three be a charm for MCI WorldCom?

The nation's second biggest long-distance company has failed twice this year to acquire a wireless phone company. Now MCI WorldCom is said to be eyeing Sprint, the No. 3 long-distance company and parent of the Sprint PCS mobile phone business.

MCI WorldCom and Sprint both declined to comment on their discussions, first reported yesterday in The Wall Street Journal.

If MCI WorldCom can bring Sprint to the altar, the merger would make a stronger No. 2 in long distance to AT&T Corp. and finally give WorldCom a foothold in the fast-growing wireless business. Sprint PCS has 4 million wireless customers.

"I'm not surprised that MCI WorldCom is making this move because of the void in their wireless space. Sprint would give them the capability," said Liza Henderson, a director with TeleChoice Inc., a Boston-based consulting company.

Earlier this year, MCI WorldCom made an overture to acquire AirTouch Communi-cations, but was trumped by Vodafone PLC of Britain. MCI WorldCom then started negotiating with Nextel Communi-cations, but those talks fell apart in May because of price.

Soon after, MCI WorldCom chief executive Bernard Ebbers told investors he expected to get into the wireless business within a year.

Ebbers is worried that another big merger like last year's acquisition of MCI, paid for by issuing billions of dollars worth of new stock, will dilute the value of MCI WorldCom's shares.

But his delays may prove costly because the explosive growth of the wireless business is a popular theme on Wall Street. At last count, the number of wireless customers in the United States totaled 79 million, up from 16 million in 1993, according to the Cellular Telecommunications Industry Association.

Notably, Nextel's stock has nearly doubled to about $65 a share since talks with MCI WorldCom ended. And last week, Bell Atlantic struck an agreement to acquire the U.S. mobile phone network of Vodafone AirTouch in a deal that will create the nation's largest wireless phone company with 20 million customers.

Together, MCI WorldCom and Sprint would control about 30 percent of the U. …

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