Qwest offers $7.3 billion to MCI

Worried, that Verizon could swoop in and buy out MCI, Qwest made an official offer of $7.3 billion to MCI Inc. That about a billion more than what Qwest had reportedly offered earlier. Wall Street Journal says that Verizon has also re-adjusted its bid accordingly for MCI, and the MCI board is well aware of the two offers. The fact that MCI is much less desired candidate than AT&T is reflected in the fact that SBC paid nearly 60% more than even the best offers for MCI. In case Verizon buys MCI, chances are it is going to sell off most of the assets and long distance business outside of its 13-state region. “This will destroy at least 50% of MCI’s revenue base and generate enormous job losses at MCI,” says Dan Berninger, senior analyst with Tier 1 Research. Qwest, on the other hand is ready to take the battle to other states and duke it out with larger Bells. “The Bells clearly are proceeding with a regional dominance strategy that already leaves them the #1 provider of LD, Local, DSL, high capacity data, and wireless in their respective regions,” points out Berninger. “The acquisition of AT&T and MCI appeal from the perspective of reducing competition, but they do not alter the larger game plan.”