https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-new-logo.png
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Technology Solutions Brokerages
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
    • Diversity, Equity & Inclusion
  • MSP 501
    • Back
    • 2022 MSP 501 Rankings
    • 2022 NextGen 101 Rankings
    • MSP 501 Information Center
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
  • Channel Futures TV
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
  • Resources
    • Back
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Advertise
    • 2022 Editorial Calendar
  • Awards
    • Back
    • 2022 MSP 501
    • Channel Influencers
    • Circle of Excellence
    • DE&I 101
    • Channel Partners 101 (CP 101)
  • Events
    • Back
    • CP Conference & Expo
    • MSP Summit
    • Channel Partners Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • About Us
  • DE&I
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Technology Solutions Brokerages
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
    • Diversity, Equity & Inclusion
  • MSP 501
    • Back
    • 2022 MSP 501 Rankings
    • 2022 NextGen 101 Rankings
    • MSP 501 Information Center
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
  • Channel Futures TV
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
  • Resources
    • Back
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Advertise
    • 2022 Editorial Calendar
  • Awards
    • Back
    • 2022 MSP 501
    • Channel Influencers
    • Circle of Excellence
    • DE&I 101
    • Channel Partners 101 (CP 101)
  • Events
    • Back
    • CP Conference & Expo
    • MSP Summit
    • Channel Partners Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • About Us
  • DE&I
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Agents
  • Cloud Service Providers
  • Channel Partners Events
 Channel Futures

Telephony/UC/Collaboration


Business News – WorldCom/Sprint Deal Dies

  • Written by Channel
  • July 31, 2000

Posted: 08/2000

Business News

WorldCom/Sprint Deal Dies
Deutsche Telekom May be Ready to Buy

By Ken Branson and Kim Sunderland

After twisting in the wind for several days, the proposed $129 billion merger between WorldCom Inc.
(www.wcom.com) and Sprint Corp. (www.sprint.com) apparently is dead. Antitrust regulators in the European Union
(EU) and the United States killed it.

Given the U.S. Department of Justice www.usdoj.gov
Antitrust Division’s opposition to the merger, which filed suit to stop it, and the antitrust regulators of the
EU, who were just as opposed, a formal declaration to end the pursuit came July 13.

In the meantime, while Sprint CEO William Esrey says his company is not for sale, persistent rumors suggest the company is discussing an alliance with Deutsche Telekom AG
(www.dtag.de).

As the WorldCom/Sprint deal came to rest, Deutsche Telekom reportedly has been talking with Sprint, Cable & Wireless plc
(www.cableandwireless.com) and VoiceStream Communications Inc.
(www.voicestream.com). Neither DT nor any of its intended targets will discuss those rumors.

“There are a lot of rumors about these companies,” says Deutsche Telekom spokesman Hans Ehnert. “We at Deutsche Telekom don’t comment and we don’t join speculation in the papers or in the media about our company.”

Some analysts believe Sprint is an attractive prize for foreign telecom carriers that want to enter the world’s largest telecommunications market. Sprint–including its wireless subsidiary, the separately traded Sprint PCS
(www.sprintpcs.com)–is worth about $100 billion, based on its stock prices.

While U.S. law forbids a foreign company from owning more than 25 percent of an American carrier without a waiver from the FCC
(www.fcc.gov), it comes as no surprise to analysts that foreign carriers would try to enter the U.S. market this way, and DT has more incentive than most to try.

Still, Sen. Fritz Hollings (D-S.C.) says he will protest any such waiver.

“They’ve [DT] got to open up and go international and they know that, because they are late,” says Sue
Uglow, principal analyst at the London-based consultancy Ovum Ltd. (www.ovum.com).

Still, there is much for the German carrier to crow about. It dominates the largest economy in Europe; it is the biggest ISP in Europe; and it has lots of cash. In June, DT placed a $14.5 billion bond deal on the market, and saw it quickly oversubscribed. In May, the company’s shareholders authorized the issuing of new stock worth $95 billion.

In the meantime, Deutsche Telekom made clear it intends to be a major player in central and eastern Europe. A 50/50 partner with SBC Communications Inc.
(www.sbc.com) in the holding company that owns 60 percent of MATAV Rt
(www.matav.hu), the incumbent Hungarian carrier, Deutsche Telekom in early July announced it would buy out SBC, which would give it a controlling interest in
MATAV.

In addition, Deutsche Telekom has won a tender–the right to buy–on 51 percent of Slovak Telekom
(www.slovak.com). It also has acquired control from France Telecom
(www.francetelecom.com) in the Swiss data carrier MultiLink SA
(www.multilink.com), and 51 percent of the Czech fiber company PragoNet
(www.pragonet.cz).

It’s in the west that Deutsche Telekom has had less luck. A three-way joint venture with France Telecom and Sprint, Global One Inc.
(www.globalone.com) had operating troubles from the beginning. When Deutsche Telekom made a move last year on Telecom Italia SpA
(www.telecomitalia.it) without consulting its partners, the alliance began to unravel.

Sprint and DT eventually sold their shares in Global One to France Telecom, and the French carrier has bought up much of what it and DT once owned together.

As Uglow and other analysts see it, what drives DT’s acquisitive instinct is its customer base among German multinational firms, or multinational firms with a substantial
presence in Germany.

“And where are those guys from?” she asks rhetorically. “North America and Japan.”

That means that DT has to get busy in Asia and North America. Sprint fills the bill in North America: It has a nationwide long
distance network, a booming mobile business in Sprint PCS and an ILEC business in 18 states.

In addition, Deutsche Telekom already owns 10 percent of Sprint, a leftover from its three-way alliance with Sprint and France Telecom.

Cable & Wireless would provide a presence in Asia and North America–though nothing as broad as Sprint, so Uglow says she believes it would be an unlikely target at the moment.

It’s also possible that DT could acquire a remaining RBOC, but that seems unlikely, since the RBOCs don’t have much in the way of an international presence, and come with an obligation to provide local dial tone in the United States, the analysts say.

However, there has been renewed buzz about DT making another run at Qwest Communications International Inc.
(www.qwest.com). That, however, would seem to be an odd move, considering what happened between Qwest and DT earlier this year. After Qwest and the former US WEST Inc. had announced intentions to merge, DT reportedly engaged in merger talks with
Qwest. When published reports seemed to indicate that DT would be interested in Qwest but not in US WEST, US WEST officials threatened legal action, and the discussions between Qwest and DT reportedly ceased.

Would Deutsche Telekom buy WorldCom? Analysts think this is a possibility, but a remote one, given the importance DT’s management attaches to wireless assets, and WorldCom’s relative lack of such assets.

Finally, VoiceStream may be more what DT needs. VoiceStream, a wireless carrier, uses GSM technology, which dominates Europe. While its coverage may not be national, it is at least extensive in the United States. And, unlike Sprint, it comes without the obligation to offer local dial tone.

Tags: Agents Telephony/UC/Collaboration

Most Recent


  • GoTo Expands Mobile Device Management with Planned Purchase of Miradore
    The acquisition will allow for flexible end-to-end support of all devices for SMBs.
  • Global social network
    As Commoditization Takes Toll on Telco Revenue, Providers Eye Network-as-a-Service
    Telco providers can rake in the big bucks with network as a service offerings – if they get their act together. A new study by ABI Research touches on the rise of network as a service (NaaS). Reece Hayden, ABI’s distributed and edge computing analyst, said the NaaS market will surpass $150 billion by 2030. Moreover, […]
  • Hired
    Zoom Taps Telarus, Intelisys Alum to Oversee Contact Center Partner Experience
    Knight spent the last two and a half years building the contact center practice at one of Zoom's top partners.
  • Chatbot on laptop
    Avaya Reshapes Partner Landscape with New Cloud Products for a Hybrid World
    The company is offering more low code, no code solutions as well.

Leave a comment Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Welcome Mat
    Ex-Telarus Exec Scott Forbush Leaves Upstack for PPT Solutions After 5 Months
  • Woman with questions
    Should We Just Call Master Agents Distributors?
  • Benefit, Plus Sign
    TBI, Avant Add New Cloud, Security Suppliers to Lineups
  • CIO
    ScanSource Hires New CIO to Lead Global IT Strategy

Upcoming Events

View all

MSP Summit

September 13, 2022 - September 16, 2022

Channel Partners Conference & Expo

May 1, 2023 - May 4, 2023

Galleries

View all

Microsoft Reveals 2022 Partner of the Year Awards

July 6, 2022

Channel People on the Move: AT&T, HPE, Google Cloud, Comcast, More

July 5, 2022

Missed June’s Cloud News? AWS, VMware, HPE, Google Cloud Made Headlines

July 5, 2022

Industry Perspectives

View all

The Role of Mentors and Sponsors in Advancing Your Tech Career

July 5, 2022

How to Make Embracing Change Part of Your Company Culture

July 1, 2022

How to Differentiate to Leverage 5G’s Revenue Opportunity

June 28, 2022

Webinars

View all

VEP Platform for Delivery of uCPE, SD-WAN and SASE

June 29, 2022

The Digital Worker: How to Empower Customers with a Flexible, Scalable VDI Solution to Enable Remote Work

June 30, 2022

Growing Partner Revenue and Customer Satisfaction with Power Management Services

June 23, 2022

White Papers

View all

Work Goes Remote – (and Other Top ITOps Trends)

May 25, 2022

The New Bottom Line: How MSPs Can Meet the Healthcare Crisis While Evolving Their Businesses

April 19, 2022

How to build a Security Operations Center (on a budget)

April 4, 2022

Channel Futures TV

View all

Vonage a ‘Single Communications Stack Provider’ for Partners, Customers

IBM, Partners and the $1 Trillion Hybrid Cloud Opportunity

June 26, 2022

Agents Share ‘Secrets,’ Industry Opportunity

May 11, 2022

AT&T, Microsoft, Cisco, ThreatLocker on Unlocking Partner Potential

May 6, 2022

Twitter

ChannelFutures

With planned acquisition of @MiradoreLtd, small and midsized businesses can now partner with @GoTo for a one-stop-s… twitter.com/i/web/status/1…

July 6, 2022
ChannelFutures

Read about @ScienceLogic's two new hires. dlvr.it/STRqwM https://t.co/BWeZo4fXbs

July 6, 2022
ChannelFutures

Breaking down the 2022 #Microsoft @msPartner of the Year Awards. dlvr.it/STRlVC https://t.co/HspwIXREp2

July 6, 2022
ChannelFutures

RT @MSP_Summit: Today's #MSPSummit & Channel Leadership Summit #SpeakerSpotlight is on @Len_DiCostanzo, CEO of MSPToolkit! Learn from one o…

July 6, 2022
ChannelFutures

Global software company @Nable has acquired @Spinpanel, a multi-tenant Microsoft 365 management and automation plat… twitter.com/i/web/status/1…

July 6, 2022
ChannelFutures

.@nitelusa weighed in on @ABIResearch's latest study. dlvr.it/STRVYg https://t.co/CudmYUiLjz

July 6, 2022
ChannelFutures

.@Zoom's hiring of Brandon Knight brings aboard one of the most respected contact center experts in the agent chann… twitter.com/i/web/status/1…

July 6, 2022
ChannelFutures

Distributor @Infinigate to acquire @nuviasgroup to create "pan-European #cybersecurity powerhouse."… twitter.com/i/web/status/1…

July 5, 2022

MSP 501

The industry's largest and most comprehensive partner awards program.

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Galleries

Educational slide shows and images from live events.

Media Kit And Advertising

Want to reach our audience? Access our media kit.

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Events
  • Telecoms.com
  • MSP 501
  • Black Hat
  • IoT World Today
  • Omdia

WORKING WITH US

  • Contact
  • About Us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2022 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X