Worldcom, Inc. And Sprint Corporation Essay

In 1982, the Justice department ordered the separation of ATT into local subsidiaries. MCI was one of the main competitors of AT&T and the impact of this new competition on MCI was uncertain. In this case the financial impact of this increased competition will be analyzed.

The time is now 1995; the internet is slowly evolving, and just as the company survived the arrival of television and other technology so it must with the internet. Convinced the internet will have

The future of the telecommunication industry is an exciting future. No longer can these companies depend on telephone service plans to maintain profit. Each company needs to find other avenues, packages and services that can be sold to existing customers while attracting new customers. The companies

SGMT  6050  –  Case  Write-­‐Up   McCaw   Cellular  Communications:  The  AT&T/McCaw  Merger   Negotiation     Armin  Ezatagha     Student  Number  ⏐  205  576  707   eMail  ⏐  aezatagha12@schulich.yorku.ca     Schulich  School  of  Business   Tuesday,  March  05,  2013                                 Current  Telecommunications  Ecosystem     McCaw  Cellular  Communications  (MCC),  although  positioned

After largely dominating the telecommunications market for a century, Telstra’s competition has recently become more widespread. In order to effectively adapt to this changing market, Telstra has employed the use of market segmentation in an attempt to

Question 1 Several factors have been proposed as providing a rationale for mergers. Among the more prominent ones are (1) tax considerations, (2) diversification, (3)

Our case study titled, The AT&T and McCaw merger negotiation, provides us with an opportunity to negotiate the terms of the merger between McCaw cellular and AT&T. McCaw was the largest competitor in the rapidly growing cellular telephone communications industry. AT&T was the dominant competitor in long-distance telephone communications in the United States, and one of the largest corporations. Prior to the negotiations, it had no position in cellular communications.

Before 2002, WorldCom was one of the top telecommunication businesses in its industry because of many acquisitions obtained by the company. Due to the increased popularity of the internet and the acquirement of UUNet and MCI

I. BACKGROUND: CelluComm and GMCT and the Industry AT&T’s Bell Laboratories cellular telephone networking innovation had enabled several cellular network operators to get licenses from the FCC to operate in separate license territories right about the same time AT&T was broken up in early 1980s. These operators were either companies like Cellular Communication Services, Inc. (CelluComm) or small entrepreneurs who had won license territories through the lottery system. CelluComm’s  president  and  founder  Ric  Jenkins  was  known  for  being  an  aggressive businessman  who  had  extended  it  to  a  200  million  dollar  enterprise  ranking  in  the  top  20  of  the industry.  Key  to

From 1984 until 1996 AT&T was an integrated telecommunications services and equipment company, succeeding in a newly competitive environment. In 1995 On September 20, AT&T announces that it is restructuring into three separate companies: a services company, retaining the AT&T name; a products and systems company (later named Lucent Technologies) and a computer company (which reassumed the NCR name). Lucent is spun off in October 1996, and NCR in December, 1996. Three years later AT&T announces general availability of its local residential telephone service in New York with a bundled plan called "AT&T Local One Rate New York." This is AT&T's first general reentry into the consumer local telephone business since the breakup of the Bell System. It occurs under the provisions of the Telecommunications Act of 1996. The Telecommunications Act triggered dramatic changes in the competitive landscape. SBC Communications Inc. established itself as a global communications provider by acquiring Pacific Telesis Group (1997), Southern New England Telecommunications (1998) and Ameritech Corp. (1999). In 2005, SBC Communications Inc. acquired AT&T Corp., creating the new AT&T. With the merger of AT&T and BellSouth in 2006, and the consolidated ownership of Cingular Wireless and YELLOWPAGES.COM, AT&T is positioned to lead our industry in one of its most significant transformations since the first

     In today’s telecommunication market there is a lot of competition by industry giants such as Sprint,

This case raises many interesting questions concerning the record setting issuance of corporate debt by WorldCom, Inc. (“WorldCom”). Both the surprisingly voluminous structure of the proposed issuance and the foreboding macro-economic climate in which it was slated spark concerns over the risk and cost of the move. One of the first questions that must be addressed is whether WorldCom’s timing was appropriate. Next, the company’s choice of structure for the bond issuance must be analyzed. Finally, the cost of issuing each tranche of debt must be estimated in order to determine how much WorldCom is actually giving up to achieve the $6 billion in funds.

We will further discuss what led to this situation, and give a recommendation on the changes that should have been made prior to the divestiture in 1984.

Comparable companies were needed in order to calculate the WACC for each business segment. The comparable companies were chosen using the following measurements: similar product lines, revenues, and bond ratings. Alltel Corporation, Sprint Corporation, and Bellsouth Corporation were determined to be comparable companies for Teletech’s Telecommunications Segment. Avaya Inc., Lucent Technologies, and Commscope Inc. were comparable comps for the Product and Systems Segment. (see Exhibit 1). The three comps for each segment were than averaged to create an appropriate WACC for each separate segment of Teletech.

In a $35 billion deal, Sprint Nextel prides itself on being able to provide innovative services and technology to a wide range of consumers, business associates, and government officials. Although Mr. Forsee has said, “This merger positions Sprint Nextel for greater success than either company could have achieved alone," there are many obstacles that Sprint Nextel must overcome in order to become the leading cell phone network provider. First, one must examine the problems with Sprint and Nextel before the merger.