International musical chairs once again

A few years ago it appeared that there would be three major global telecom alliances: AT&T/ WorldPartners/Unisource, British Telecommunications and MCI's Concert, and Sprint's Global One. Now all that's changed.

Global One was fairly well along the path of self-destruction before the MCI WorldCom/Sprint merger announcement. We can now anticipate that Global One will either go out of existence or, at the very least, wither away. France Telecom and Deutsche Telekom will each sell their stakes in Sprint for more or less than $10 billion each. They may redefine some form of a venture between them, but unraveling the current Global One venture may prevent that from occurring any time soon.

AT&T and BT are now creating a newly defined version of Concert. And although MCI WorldCom lost its part of Concert, the carrier on its own is emerging as the other major supercarrier in the global telecom marketplace. What's more, MCI WorldCom didn't need much from Sprint on this front. MCI WorldCom already had substantial assets and capabilities to provide international business services. It owns or has an interest in international fiber cables (Gemini) and has regional networks (Ulysses) around the world. And through its MFS and other units, MCI WorldCom has a large number of foreign cities wired with fiber.

Still, users should expect a period of continued confusion in the international marketplace. It will take AT&T and BT at least a year before their Concert venture is defined, separate networks are interconnected, and pricing, operational issues and customer-ownership issues are worked out.

Likewise, MCI WorldCom and Sprint will have to plow through roughly a year dealing with regulators before their merger will receive final approval. Only then can much of the integration of the two companies take place.

While all this activity is occurring, the basic cost for international telecom services between the U.S. and Europe, and within Europe, is rapidly decreasing. Large numbers of new competitors are developing in the European marketplace to provide all sorts of local and long-distance bandwidth. This should provide yet another acquisition feeding frenzy in the near future for the major players.

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