MCI WorldCom's pending Sprint acquisition
 
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In 1998, MCI sold its Internet business to ensure that regulators would approve its merger with WorldCom. Two years later, MCI WorldCom is probably feeling a sense of déjà vu.
Then, WorldCom already owned UUNET, the ISP with the most business and wholesale customers. The concern was that the combined MCI WorldCom would clearly dominate the Internet services world if they were to merge MCI's Internet business with UUNET. So, they sold off MCI's Internet business to Cable & Wireless.
Now, it is expected that Sprint, which MCI WorldCom is in the process of acquiring, will be pressed to also sell off its Internet business in order to see this merger through.
In October, Network World published an article entitled "Sprint's Internet business heading for the block?" In that article, industry experts gave their thoughts on possible suitors. Cable & Wireless, Deutsche Telekom, BellSouth and PSINet were all thought to be potential buyers of Sprint's Internet business.
But not much has been said in recent months regarding Sprint or MCI WorldCom's plans. While most still believe there is basically no chance that regulators will approve MCI WorldCom's acquisition of Sprint if Sprint does not ditch its Internet business, any new plans have been hush-hush.
Whether it happens now, or at year-end when the deal is expected to become final, Sprint's Internet business is expected to be sold off. But will ISPs be scared off by MCI WorldCom's messy sale of MCI's Internet business to Cable & Wireless?
ISPs looking to expand their U.S. coverage will find a solid set of assets from Sprint, but worries that MCI WorldCom will not let go of key executives, engineers or customer support staffers could hinder future deals.
And what about Sprint business customers? Former MCI Internet customers that were sold to Cable & Wireless suffered. Many talked about poor customer service and inaccurate billing issues that took months to resolve. Is this what Sprint users have to look forward to?
One thing is for certain, any ISP that enters into an acquisition arrangement with MCI WorldCom and Sprint, should learn from Cable & Wireless' sour deal. Specifically outlining what information and which staff members will be part of the deal should clearly be worked out before signing on the dotted line.
And now that we're close to the end of the first quarter, perhaps there will be more information about Sprint and MCI WorldCom's plans to see their merger through.
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Denise Pappalardo is a senior editor for Network World, covering ISPs, VPNs and related topics. Reach her at denisep@nww.com.
Internet Services archive
Past newsletters.
Network World, 10/05/99.
Users blast MCI WorldCom merger
Network World, 10/11/99.
MCI WorldCom Info
Network World articles about MCI WorldCom and financial and stock info.
