CLINTON, Miss.—Following weeks of speculation, WorldCom Inc. officially announced it is exiting the wireless resale business and laying off about 2,200 related employees.
“After carefully assessing our business and the current market conditions for wireless resale services, we have decided to exit the wireless resale business—a business that is not a core WorldCom asset,” said John Sidgmore, WorldCom president and chief executive officer. “As we exit the business we will further strengthen our cash position.”
With approximately $1 billion in revenues and nearly 2 million customers, WorldCom is the largest reseller of wireless services in the United States.
WorldCom said it entered the resale marketplace five years ago as a first step toward becoming a facilities-based wireless carrier, which ultimately did not materialize. Slowing market growth, intense pricing pressure and acquisition cash requirements have rendered WorldCom’s position as a pure reseller unprofitable, the company said.
The multi-month process of exiting the wireless resale business will begin immediately. The company said it has received interest from several major facilities- based carriers regarding purchasing the business and WorldCom expects to quickly evaluate its options and select an exit strategy. As it does so, some of WorldCom Wireless’ 2,200 workforce will be reduced while the remainder will continue operations in the interim period.
During the transition process, the company will continue to serve its existing customer base and will continue to provide customer care. Additionally, once an exit method is determined, customers will have the option of selecting a new wireless provider or transitioning to another carrier, said WorldCom.
