UPDATE: MCI WorldCom to Offer 'All Distance' Plan

MCI WorldCom Inc. today said the company next month will offer customers an "all distance" service to compete with Bell Atlantic Corp., which recently became the first regional Bell operating company to win approval to offer long-distance service.

Bernard Ebbers, president and chief executive officer of MCI WorldCom, said the service would include a "large bucket of minutes" that could be used for local or domestic long distance in any combination for a fixed monthly fee.

Ebbers, describing the "all distance" service in a speech to the National Press Club, said details are still being worked out, but the service would be offered to compete in New York with Bell Atlantic, which last month won approval to offer long-distance service in that state from the U.S. Federal Communications Commission. [See "UPDATE2: FCC OKs Bell Atlantic for Long Distance," Dec. 22, 1999.]Ebbers said bundled services, such as the "all distance" package, will become essential to the telecommunications business, particularly as the traditional business of companies like MCI WorldCom -- long-distance voice service -- becomes less and less important.

"One of the fundamentals of our business going forward, and I am 1,000 percent convinced of this, is that consumers and businesses are going to buy complete bundles," Ebbers said. "If you are not 'all distance' in this business, you won't go the distance."

MCI WorldCom has been busy filing documents with the Securities and Exchange Commission, the Department of Justice and the European Union to complete its acquisition of Sprint Corp., which is expected to close in mid-2000, Ebbers said. [See "UPDATE: MCI WorldCom, Sprint Confirm US$129B Deal," Oct. 5, 1999.] The company continues making presentations to regulators "which we think support the case that this is a pro-competitive merger," he added.

Asked if there were more mergers and acquisitions on MCI WorldCom's horizon, Ebbers said there were many he would like to pursue, but, aside from joking about getting in a bidding war for German telecommunications carrier Mannesmann Arcor AG & Co., he didn't mention any prospective targets. However, he said MCI WorldCom continues to explore opportunities in Europe, which currently is the second-fastest growing component of MCI WorldCom's business.

"There are lots of things that are going to start evolving in this industry.

Consolidation between transoceanic companies has really not started yet. In Europe, there is great opportunity for increasing your customer base," he said.

He also said he was disappointed that America Online Inc. didn't come knocking on MCI WorldCom's door before it decided to pair with Time Warner Inc. this week, but called that deal "a great merger (that) is going to offer consumers tremendous advantages." [See "UPDATE2: AOL to Merge with Time Warner for US$350B," Jan. 10.]He said the merger also would be positive for MCI WorldCom because AOL is the company's largest customer. MCI WorldCom provides Internet backbone service to AOL and a lot of its connections to homes, Ebbers said.

"We feel like this will give them the capability of getting to a lot more homes," he said. "Remember, we supply the underlying pipes to their service and the fact that Time Warner has local access to homes will increase their need for pipes that they buy or lease from us. So we are very, very excited about the potential of that merger."

Ebbers also pledged that Sprint would maintain MCI WorldCom's open access philosophy in designing its broadband wireless network to allow users to choose an Internet service provider. MCI WorldCom-Sprint will offer the choice of ISPs by implementing open access to its network wherever wholesale capacity is available, he said.

Additionally, Ebbers said the new WorldCom would accelerate its deployment of broadband wireless in rural and underserved areas of the U.S. within a year after the acquisition of Sprint closes, and he said MCI WorldCom would step up competition for infrequent callers by offering a nationwide plan with no minimum usage or monthly fees.

MCI WorldCom, in Jackson, Mississippi, can be reached at +1-601-360-8600 or at http://www.wcom.com/. Sprint, in Westwood, Kansas, can be reached at +1-913-624-3000 or at http://www.sprint.com/.

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