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October 2, 1997updated 01 Sep 2016 6:27pm

OVUM SAYS WORLDCOM BID FOR MCI IS BAD NEWS FOR BT & WORLDCOM

By CBR Staff Writer

Worldcom Inc’s proposed $30bn acquisition of MCI Communications Corp would be a very bad strategic move for the two companies says analyst David Lewin from UK telecoms consultant Ovum Ltd. The onus on the British Telecommunications Plc and MCI original merger deal was a combination of interests, British Telecom got a foothold in the US long distance market and internet expertise, and MCI gained European presence and local market experience. MCI acquisition by Worldcom on the other hand would merge two companies, both in the long distance market, which are striving to get into the US local exchange markets, and as a result Worldcom would only have an increased market share in an increasingly competitive market Lewin said: If BT fails to acquire MCI the deal would favor BT shareholders in the short term, but be a disaster for the company long term.

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