MCI Worldcom in published reports indicated it would be interested in buying a mobile phone service company in the coming years as competition drives down the value of wireless companies.
MCI Worldcom management previously has insisted that wireless service was not a priority for the newly combined long-distance company, but Chairman Bert Roberts said the company eventually will compete in the wireless market.
“Over time you will see us in that market,” said Roberts in a Bloomberg News report. “In the next several years, there will be opportunities to buy that would allow the impact on our earnings to be accretive.”
Two speculation targets are Omnipoint Corp. and Nextel Communications Inc. Omnipoint’s stock has fallen 70 percent since April. Nextel’s stock is off about 37 percent.
Analysts for some time have speculated Nextel would be a target of the new company, which today is reselling cellular service. MCI Communications Corp. once owned a 17-percent stake in Nextel, but ended its relationship with the carrier in 1994. MCI is intimately familiar with Nextel’s management team.
A marriage with Nextel also would provide a national digital footprint with high subscriber growth and average revenue per user, say analysts.
Nextel’s enhanced specialized mobile radio service targets the business user, which would map well with the MCI Worldcom stated strategy for customer acquisition of business-to-business users.
MCI’s strength in wireless slowly faded as the company early this year reduced efforts to market wireless service as a stand-alone product.
