February 14, 2005 10:18 AM PST

Verizon, MCI to link up in $6.7 billion deal

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BellSouth--especially since Sprint is already in the process of merging with Nextel.

One rival played down the notion of an increased threat from an MCI-enhanced Verizon.

"It doesn't change anything for BellSouth," Battcher said. "Our focus is on wireless and broadband, and that doesn't change for us" with the Verizon-MCI merger.

He declined to comment on industry speculation that BellSouth had been interested in buying MCI.

"It's a buyer's market for long-haul networks, so there's no need to own the assets," said BellSouth's Battcher.

While buying MCI saves Verizon the time and money of building its own nationwide network to serve business customers, analysts said MCI's network needs major upgrades and investments.

"MCI has been underinvesting in their network," said Brad Wilson, an analyst with Legg Mason. "Just looking at the numbers, it seems like Verizon is going to have to invest a few billion to get the network up to snuff."

Analysts also pointed out there will be other challenges ahead for the two companies. For example, they'll not only have to link up their networks but also find a way to manage MCI's large pool of roughly 60 different billing systems, Black said.

"MCI has grown through acquisitions over the years, and so they have all these different billing systems," Black said. "They used to have about 220 different billing systems, but now it's down to about 60, which is still large."

Neither Verizon nor MCI has commented on specifics regarding the leadership of the combined company.

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Verizon/MCI merger
What MCI did to stockholders, employees and the public was criminal. I would never do business with them again and I certainly won't ever do business with verizon now either. I'm sure my daughter who was never paid her last 40 hour pay check from MCI won't either. The thieves walked away with millions while everyone else suffered and our courts let it happen.

I am so angry with them and now verizon. MCI deserves to die a slow and long death!
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business with verizon
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