What if, Leucadia buys MCI

You might have heard about Leucadia National planning to buy MCI by now, and it is difficult to figure out what LN would do with MCI. The same problems will face a Leucadia-owned MCI – competition from the RBOCs; collapsing price levels as VoIP is deployed; a lack of local access assets in competing with the Bells on service bundles, and no wireless assets, points out Allan Tumolillo, COO of Probe Financial Associates and one of my favorite analysts. “Leucadia’s announcement may hasten a decision from Verizon as to its intention: does it go after MCI and get in a bidding war or does it turn its sights on AT&T, a bigger and better managed company,” says Tumolillo, “Verizon is not alone in ‘gaming’ the situation” Tumolillo continues “as Qwest and Sprint could benefit from a merger with MCI.” BellSouth & SBC are likely to sit out because well they have AT&T Wireless to deal with.

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