NEW YORK-MCI WorldCom Inc. sees an opportunity to transform its wireless resale business into one of full-fledged virtual network operation, said Bernard J. Ebbers, president and chief executive officer.
Resale for the three nationwide wireless carriers would become part of WorldCom under a plan the company announced last week to issue tracking stocks for two business units. WorldCom also would comprise multichannel multipoint distribution system, data, dedicated Internet, business voice and business services, which include Web hosting.
“Our wireless resale business for the three national providers is doing extremely well. We are very excited about its growth, which is about 100 percent,” he said at the “Bear Stearns 2000 Global Communications Conference” held here last week.
“There are opportunities to change the structure from strictly resale to VNO through provision of our distribution capabilities.”
The WorldCom unit would be focused on growth, while MCI would concentrate on generating cash, Ebbers said. Paging, dial-up consumer Internet, wholesale and prepaid services also would come under the MCI umbrella.
“There has been speculation that we would do something to buy a wireless company, but the answer to that question is `no,’ ” he said.
“The way things are evolving, AT&T has put its wireless business into a tracker and will spin it off. Vodafone, Bell Atlantic and GTE (i.e., Verizon) have spun off their wireless business. SBC and BellSouth are putting their wireless business into a separate company.”
MCI WorldCom hopes to issue tracking stocks by mid-2001 for the two units, choosing this route over spinoffs because it “is quicker, seamless to our customers and requires no regulatory approvals,” Ebbers said.
In and of themselves, tracking stocks don’t boost share price, the chief executive said. However, they free the reorganized units they represent to “behave differently,” each in accordance with its respective goals, whether growth or cash generation, Ebbers added.
Furthermore, he concurred with the opinion of C. Michael Armstrong, chairman and CEO of AT&T Corp., that “integration of wireless into a bundled service product (across media) will not happen.”
