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Special Report: TELECOM TITANS
BT-MCI: POWERING UP
The combination of MCI Communications Corp. and British Telecommunications PLC certainly looks formidable on paper. Once BT completes its purchase of a 20% stake in the No.2 U.S. long-distance carrier for $4.3 billion, the first telecom mega-alliance will be unleashed. The two plan to pour $1
billion into a joint venture offering around-the-world-network services to international corporations.
BT is the larger partner by far, with $21 billion in revenues last year vs. MCI's $11.9 billion. It carries 90% of the phone traffic in Britain, home to 14% of the world's multinationals. MCI, with 20% of the U.S. market, is a scrappy competitor known for innovative marketing. It has a $2 billion plan to build a local phone network in 200 U.S. cities (to snag corporate traffic), an alliance with Canadian long-distance carrier Stentor, and a joint venture in Mexico that plans to start a long-distance service there in 1996. But BT and MCI must smooth out cultural and corporate differences. And they need an Asian partner to match AT&T's clout in the region.