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June 17, 1997updated 05 Sep 2016 1:05pm


By CBR Staff Writer

In their race to provide better and wide-ranging services and improve their profits an increasing number of telecoms companies are pulling their resources together, and now McLeodUSA Inc has agreed to purchase the Illinois phone-operator Consolidated Communications Inc for $420m. The move follows MCI Communications Corp’s link up with British Telecommunications Plc and AT&T Corp and SBC Communications Corp, who are negotiating a possible $50bn merger. It is a strategic move designed to expand our operations in the Midwest telecom market, Jenny Lawrence, a company spokeswoman, said. The Iowa firm believes that the regional market has an enormous potential but it is not being fully exploited because the bigger phone companies are either too focused on merging or on going international. The Consolidated Communication’s network has five switching center, fiber-optic routes connecting various cities, including Chicago and St.Louis, a local-phone system with more than 100,000 phone lines and it is setting up new local networks that will compete with existing operators in Illinois, Indiana and Missouri. Last year Consolidated recorded a $15.1m profit on revenue of $250m while McLeod had a loss of $22.45m although revenue climbed 180% to $81.3m.

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