Verizon's sure to buy MCI. Here's why
An article in today's New York Times (reg. rqd.) speculates that with AT&T being acquired by SBC, it may make business sense for either Verizon, BellSouth or Qwest to acquire the largest remaining long-distance provider actively trying to sell itself.
And that would be MCI.
This will happen, and the purchaser will be Verizon. I don't know that for a fact, but I will stake my reputation on it.
Let's look at this issue from both a process-of-elimination as well as a positives perspective.
Process-of-elimination:
- Qwest is too regional. The brunt of their business is concentrated in 14 states from the Rockies to the Pacific.
- BellSouth is too tied in with SBC. Together, they own Cingular Wireless, the largest cellular carrier. So would BellSouth really want to compete with its main cellular partnerby purchasing a company such as MCI, with an enterprise-focused business directly in the cross-hairs of AT&T - SBC's soon-to-besubsidiary?
OK, now for the positives. Since we mostly talk about IP Telephony here, let us look at the current IP offerings of both Verizon and MCI.
- Verizon's Enterprise Solutions Group offers a suite of VoIP services.
- MCI has a suite of IP-enabled enterprise services, many of them for Virtual Private Networks.
- MCI has the world's largest Point of Presence network. That's a valuable asset for a company such as Verizon, who has national (and international) aspirations. They are going to hear SBC's footsteps, and will be compelled to respond in kind.
One more reason why this will happen: the market cap.
Verizon's market cap is $99.18 billion. MCI's? $6.35 billion.
Verizon buying MCI makes so much sense, it will happen.
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