Potential Bell Merger with a Big 3 IXC

Posted: 05/2002

Potential Bell Merger with a Big 3 IXC

“Over the next few years we’ll see the merging of local and long-distance companies, but this time it won’t be so threatening to regulators, and they won’t be blocked. Over the next year or two, local and long-distance companies will start to offer the same kinds of services and bundles and pricing. Once that happens, the reason for separate local and long-distance pricing goes away and they start to offer any-distance services.

–Jeff Kagan, independent telecom industry analyst

“The Bells may be motivated to acquire a leading IXC to increase revenue growth by gaining exposure to the enterprise data business. However it would be extremely difficult to structure a transaction without increasing exposure to the declining long-distance voice, which would place a drag on revenue growth, margins and earnings.”

–Marc Crossman, analyst, JP Morgan Chase & Co.

“Right now a merger on that scale is not something we are looking at.”

–Bob Varettoni, spokesman, Verizon Communications Inc.

“I think it is more of a regulatory picture. The approval process might be even more stringent [to acquire an IXC].”

–Selim Bingol, spokesman, SBC Communications Inc.

“Attempting to reassemble those piece parts would be very difficult to justify in front of all the regulatory and judicial oversight bodies,”

–Robert Rosenberg, president, The Insight Research Corp.


The Insight Research Corp.

Jeff Kagan

JP Morgan Chase & Co.

SBC Communications Inc.

Verizon Communications Inc.

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