MCI WorldCom Sprint is a tad unwieldy for a corporate name, but the second- and third-largest US long-distance carriers reportedly are in merger talks.
MCI WorldCom wants to buy Sprint, according to a report in Friday's Wall Street Journal. The deal would give MCI WorldCom a national wireless presence and make it a global telecommunications monolith.
A Sprint spokesman declined to comment and an MCI WorldCom spokesperson could not be reached to comment.
The Wall Street Journal reported that a deal is not imminent and that "significant obstacles remain" that could derail a merger, but cited unnamed sources who said that talks continue. The companies have talked about a financial deal in which MCI WorldCom would buy Sprint's core business for stock. Regulatory issues also have to be considered in such a merger, the Wall Street Journal said.
Analyst JB Haller said that he doubts that the two companies are in serious merger talks, noting that telecommunications carriers talk to each other all of the time and that merger possibilities inevitably come up in such discussions.
"I doubt it will happen," he said of a merger between the two.
MCI WorldCom investors aren't likely to embrace the idea of merging with Sprint, said Haller, a vice president at market researcher Current Analysis, based in Sterling, Virginia. Investors didn't like the asking price when MCI WorldCom tried to buy Nextel Communications and so are also likely to balk at Sprint's pricetag, he said.
A pairing of MCI WorldCom and Sprint does, however, make sense in some regards, Haller said. MCI WorldCom wants to get into the wireless business and it also needs a better network than the one it has "cobbled together from mergers". Sprint would offer both as well as "a damn good brand", he said.
If MCI WorldCom actually does make a play for Sprint, Haller said he doesn't think that regulators would be likely to stand in the way. A merger of the two wouldn't do much to alter the long-distance landscape because AT&T still would control the majority of US long-distance service, he said. http://www.wcom.com http://www.sprint.com