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July 12, 1987


By CBR Staff Writer

GTE Corp and United Telecommunications Inc will be taking substantial charges – $55m net for GTE, $109m net for United Telecom – with their second quarter figures to cover additional write-offs at their equally-owned US Sprint Communications long-distance telephone joint venture. The total to be written off is $350m, $260m of which is to account for depreciation and lease costs of the old long-distance lines, which are being replaced by the company’s new 23,000 mile fibre optic network. US Sprint has been transferring telephone traffic to the fibre optic network sooner than it had planned, and accordingly has to accelerate depreciation of the old network. Another $14m is for leased office space no longer occupied, and $76m is a monumental bad debt provision against money the phone company doesn’t expect to be able to collect because its billing system is apparently in a shambles. It was discovery of the billing problems that reportedly led to the resignation of president Charles Skibo, who has been replaced by the company’s vice-chairman and chief operating officer Robert Snedakar.

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