Verizon- MCI last episode

Verizon –MCI : last episode

It is almost done. Qwest, with its last offer at $ 9.7bn and a favorable MCI Board’s appreciation, thought victory was close, but Verizon came back with a new proposal at $ 8.5bn, or $26 per share. MCI's board of directors unanimously accepted this deal. Qwest, disappointed, announced it drops out from the bid. The Verizon-MCI deal will be official when MCI shareholders, FCC and state regulators approve it.

When approved, the US telecom landscape will be reshaped with two giants: SBC and Verizon. Each of them has succeeded to rebuild the old Ma Bell model with local and long distance combined. In addition, both of them are the two largest cellular service providers in the US. History is ironic, twenty years later, Ma Bell is back with twins.

It is a big victory for Verizon, getting one of the world's largest Internet networks, and some 60,000 multi-national companies in 150 countries.

For Qwest, it is a deception and a blow. It will have to reassess its strategy, find ways to reduce its debt ($16bn), and find new revenue streams. Only few partners are yet available for deals. Bellsouth is the only RBOC not participating in market consolidation. Time Warner Telecom could also be a potential candidate. Wait and see.