Blog Post

Harsh Truths about MCI-Qwest Merger

MCI is playing cute and is trying to keep Qwest hanging. It might be too late for MCI if it is waiting for that call from Verizon. If anyone who knows a thing or two about telecom knows how bad that deal will be for the likely acquirer. Qwest board nevertheless has given the go ahead for the deal.

Wall Street Journal: An MCI-Qwest combination would also represent a thicket of past and pending legal liabilities: The two have already paid a combined $1 billion in fines to the Securities and Exchange Commission for accounting misdeeds during the early 2000s. Qwest still faces investor lawsuits for which it has reserved at least $500 million for payouts to shareholders.

Denver Post: ‘If you are Qwest and you are sitting there and watching the train go by, it makes your position less tenable,’ said Scott Keller, president of in New York. ‘This (merger would not be) about providing better telephone service. It is about providing higher market capitalization.’