2/28/2005

What is going to happen to MCI?

In an article, MCI spurns Qwest again, stated that Qwest has put in a bid for MCI for 8 billion dollars. MCI, however, has been keeping close ties with Verizon and has thought about settling with the company for 6.7 billion dollars. A lot of short-term investors are upset about the idea to settle for less, but MCI has done its homework. Qwest has 17 billion dollars in debt and 7.5 billion in annual revenue. The company hasn’t shown any financial strength. Verizon on the other hand is one of the largest telecommunications companies. I can’t even believe that MCI is going out. Over the years they haven’t been doing well, but this is a company that has been around ever since I was born. It will be interesting to see what will happen to whatever company purchases MCI. Verizon is huge but they also have competitors like Cingular who merged with AT&T. One of MCI old competitors.

3 comments:

Ace said...

Older companies seem to be losing in this market. AT&T had a nice run but now they are out. Cell phones are the new way to communicate. Some people including myself don't even have a landline. This is just one of those things that happen when the market changes.

Luise said...

The problem with all this merging is that phone companies, whether cell phone or land lines, are becoming monopolies. The government is letting all of this take place but it’s inevitable that they are going to have to be broken up once again, just like they broke up AT&T. It makes no since why the government even lets it happen.

Dr. Tufte said...

-1 on Marie's post for grammatical errors.

Gee ... I still think of MCI as a new company. I guess I must be getting old.

I think the MCI shareholders will go with whomever makes the best offer. Qwest may be able to do this if they in fact need to acquire a more profitable business. It doesn't seem likely, but it does happen.