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
    • Master Agents
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
    • Diversity & Inclusion
  • MSSP Insider
  • MSP 501
    • Back
    • Apply Now
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • Videos
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
    • Channel Educational Series
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
    • Channel Convergence
  • Resources
    • Back
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Content Resources
  • Awards
    • Back
    • 2021 MSP 501
    • Circle of Excellence
    • Excellence in Digital Services
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • 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
    • Master Agents
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
    • Diversity & Inclusion
  • MSSP Insider
  • MSP 501
    • Back
    • Apply Now
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • Videos
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
    • Channel Educational Series
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
    • Channel Convergence
  • Resources
    • Back
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Content Resources
  • Awards
    • Back
    • 2021 MSP 501
    • Circle of Excellence
    • Excellence in Digital Services
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • 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

Related


  • CwCJ Logo 2020
    Coffee with Craig and James Episode No. 92: Fusion Connect, Master Agent M&A
    We get the inside scoop from Fusion Connect channel chief Rick Ribas and talk mergers with an industry expert.
  • Businesswoman with help sign
    SMBs Need Channel Partners to Help with Long-Term Remote Working
    Research shows UK SMBs need help from partners with their technology investments.
  • Survey says
    Cloud Communications Market Rocked by Microsoft, COVID-19 in 2020
    The perceived competitiveness of Slack and Google slid year over year.
  • Fuel Pump
    Vonage, Oracle, Salesforce Vets to Fuel Talkdesk Partners' Growth
    In the first two months of 2021, reseller partners have extended Talkdesk's global reach.

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

  • Telarus Vet Ends Short 'Retirement,' Will Lead PPT Solutions' Channel Sales Strategy
  • TBI Adds Rival Intelisys Alum, Tech Data, 8x8 Vets
  • 8x8 Joins Microsoft as Westcon Partner to Spur International Growth
  • Granite Unleashes Microsoft Teams Integration, Merged Voice Services

Galleries

View all

Biden Administration Issues Russian Sanctions in Response to SolarWinds Hack, Election Interference

April 16, 2021

Industry Perspectives

View all

Why Digital Transformation Is the ‘Invisible Hand’ of Our Time

April 19, 2021

SD-WAN Supports More Purposeful Shift to Cloud

April 16, 2021

How Tech Is Transforming Public Safety–and the Implications for Channel Partners

April 15, 2021

Webinars

View all

What to Look For: 2021 Threat Report

April 22, 2021

Health Care and SD-WAN: A Seller’s Guide

April 27, 2021

How MSPs Can Leverage SOCaaS to Improve Security & Grow Revenue

May 4, 2021

White Papers

View all

Carbonite Data Protection and Cyber Resilience

April 15, 2021

Top Tips: How Resellers Can Leverage Rackspace to Enhance Customer’s Cyber Security Protection with Microsoft 365 Security

March 30, 2021

Top Tips: Optimize Your Microsoft 365 Investment with Rackspace Technology

March 30, 2021

Upcoming Events

View all

Channel Partners Conference & Expo

November 1, 2021 - November 4, 2021

MSP Summit

November 1, 2021 - November 2, 2021

Channel Evolution Europe

November 30, 2021 - December 1, 2021

Videos and Fastchats

View all

5 Reasons Diversity, Equity and Inclusion Is Important

Five9 Shares Insights on Implementing a DE&I Strategy

April 13, 2021

FASTCHAT: How Fortinet Reduces Complexity Through Networking, Security

March 31, 2021

Strong Customer Experience Needs Strong Partner Experience

December 22, 2020

Twitter

ChannelFutures

.@Riverbed promotes a pair of channel executives to key positions. @RiverbedPartner @megbhappy… twitter.com/i/web/status/1…

April 20, 2021
ChannelFutures

.@Avant_CCC is help agents get better at consultative sales. dlvr.it/Ry3zJ6 https://t.co/nNkJ942wRr

April 20, 2021
ChannelFutures

.@Avaya Cloud Office by @RingCentral further expands globally, includes new features. #UCaaS dlvr.it/Ry1QMg https://t.co/sVTkX6u4SO

April 19, 2021
ChannelFutures

.@attcyber and @SentinelOne teamed up around endpoint #security. dlvr.it/Ry1GMh https://t.co/LGV3RjpUBK

April 19, 2021
ChannelFutures

#Kubernetes expertise will help #channelpartners win big in move to cloud, says @Infoblox. dlvr.it/Ry16sP https://t.co/8lB4T93fuN

April 19, 2021
ChannelFutures

.@CambiumNetworks unveils new #partnerprogram focused on health care. dlvr.it/Ry12RG https://t.co/uGNMBQyQUa

April 19, 2021
ChannelFutures

.@solarwinds pays top executives more than $65 million despite massive hack. #cybersecurity dlvr.it/Ry0tXf https://t.co/1XjFpk7WMl

April 19, 2021
ChannelFutures

.@DruvaInc now valued at $2 billion. What does this mean for #Compass channel partners? Find out what we know.… twitter.com/i/web/status/1…

April 19, 2021

MSSP Insider

Business advice for MSSPs and news from the broader security channel.

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 © 2021 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