article

The Big Get Bigger

Posted: 09/1999

The Letter

The Big Get Bigger

Khali HendersonTwenty
telecommunications companies, no more like behemoths, made the list of the world’s largest
corporations, "The Fortune Global 500," in the magazine’s Aug. 2 issue. Their
combined 1998 revenues represented $520.9 billion of the total $11.5 trillion represented
by the 43 industries on the list. As an industry, that’s good enough for seventh place,
behind banks (No. 1), cars, trading, electronics, petroleum refining and food and drug
stores, respectively.

Tokyo-based NTT ranked No. 1 among telecom companies, with $76.1 billion in 1998
revenues. The second runner up was AT&T Corp. with $53.6 billion. AT&T, however,
ranked No. 1 among its peers for profits–$6.4 billion–during the same time period. In
contrast, NTT was third with $4.7 billion.

Nearly half of the telecommunications companies in the 500-member list were based in
the United States. Among those were interexchange carriers AT&T (No. 30), MCI WorldCom
Inc. (No. 214) and Sprint Corp. (No. 227). The remainder were the former Bell
companies–Bell Atlantic Corp., New York (No. 82); SBC Communications Inc., San Antonio
(No. 104); BellSouth Corp., Atlanta (No. 149); Ameritech Corp., Hoffman Estates, Ill. (No.
225); US WEST Inc., Denver (No. 364)–and GTE Corp., Stamford, Conn. (No. 129).

While those names and rankings are no surprise, what may be is that five of those
U.S.-based telecom companies also made the short list of the top 50 companies with the
highest profits. AT&T lead the pack at No. 4, followed by Bell companies–SBC
Communications (No. 20), Ameritech (No. 24), BellSouth (No. 26) and Bell Atlantic (No.
40).

Certainly, the mega-mergers have had some hand in the performance rankings of these
telecom companies. WorldCom boosted its revenues more than 140 percent with its takeover
of MCI Communications Corp. MCI WorldCom ranks third on the short list of biggest revenue
increases. SBC Communications–the pairing of Southwestern Bell and Pacific
Telesis–ranked No. 16 on the short list of biggest increases in profits with a nearly 173
percent increase.

With approval of its TeleCommunications Inc. (TCI) acquisition, AT&T surely will
improve its leadership standing next year. Extrapolating further, should the SBC-Ameritech
combo get approval, it could ascend the list as well. Combining the companies’ 1998
revenues of $45.9 billion would put it in the No. 42 position. And Bell Atlantic-GTE? With
1998 revenues of $57.1 billion, that union would have ranked No. 28.

And, yes, there will be at least one new telecom name on next year’s list: Denver-based
Qwest Communications International Inc. Its ascension should offer hope for those
competitors aspiring to greatness. But somehow US WEST with a makeover falls short of
inspiration.

Khali Henderson

Editor-in-Chief


Leave a comment

Your email address will not be published. Required fields are marked *

The ID is: 68169