GTE Corp has had enough of the long distance telephone business, which it entered in a big way when it paid the railroad company $724.4m for Southern Pacific Communications in 1983, renaming the terrestrial business GTE Sprint and the satellite business GTE Spacenet. It has now asked its partner, United Telecommunications Inc, in the new US Sprint Communications joint venture to buy out its holding in the business. Under the terms agreed, GTE will continue to bear its share of the losses of the business until the end of this year, when United will pay GTE book value for another 30.1% of the equity – expected to be worth at about $600m, to give it 80.1%, at which point GTE will become a limited partner in the business, and won’t have to consolidate any losses from it with its figures – and United will get an option to buy GTE’s remaining interest any time from then until December 31 1995, at either book value on the date of the transaction or at December 31 1988, whichever is higher. United Telecom has taken immediate management control, and has fired the president, Robert Snedaker, replacing him with its own president and chief executive, William Esray.
