MCI attacks European telecoms companies

US-based MCI WorldCom, the acquisitive long distance carrier, marked its £70bn takeover deal with Sprint by criticising European telecoms providers for lagging behind the pace of the market.

Chief executive Bernie Ebbers warned that in any transaction between a US company and a European counterpart, it would be the US operator that came out on top. He blames continental operators for being too slow to shake off the state-owned mentality.

Certainly this industry has been a volatile one in recent years, as companies jockey for both position and scale. New opportunities have opened up as fast as the technology has developed, focusing especially on voice and data transmission across cable and mobile networks, as well as the internet. In addition, as geographic boundaries drop away in the face of demand for global services, cross-border alliances become essential.

BT, the first European telecoms operator to be deregulated, sought to build its service network through an alliance with MCI a couple of years ago but was beaten out by WorldCom. It has since established a relationship with AT&T. Vodaphone also recently secured an American partner in Airtouch.

A slow-moving European marketplace has been blamed in the past for holding back development of internet and e-business applications because of its comparatively high telephone charges. But worldwide competitive pressures are increasingly likely to generate more structural change, greater service innovation and falling costs.

Elliott Chase