SBC reveals huge cost of PacTel merger; telecom firm to write off as much as $2.3 billion in consolidation effort
Article Abstract:
SBC Communications reveals up to $2.3 billion in charges against its 1997 earnings resulting from its recent acquisition of Pacific Telesis Group (PacTel). SBC's total charges, ranging from $1.6 billion to $1.9 billion, to cover the acquisition are expected to prompt the company to post large second quarter losses. SBC intends to shut down approximately 50% of its network operation, maintenance and billing centers and staff facilities and the company admits that the PacTel merger will likely lead to a workforce reduction of less than 2%. SBC claims that $500 million for closing PacTel's California interactive-video fiber-optic network lines and coaxial cables, and for terminating SBC's Texas trial video network-services will be incorporated into its second quarter charges. The company also asserts that an extra $700 million charge for writing down network assets is being taken. Regulation costs are anticipated to account for $175 million and $100 million will be charged for unrelated interstate price-cap regulations.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
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Cable & Wireless weighs bid for Sprint; British concern has been in talks to win support to form a global giant
Article Abstract:
British telecommunications giant Cable & Wireless is considering an acquisition bid for Sprint. Rival British Telecom is planning a $21 billion takeover of MCI Communications. C&W has held initial talks with France Telecom, which owns 10% of Sprint. Telecom companies are rushing to assemble a comprehensive selection of services and technologies. The trend of global consolidation has been encouraged by recent trade agreements opening international markets. Sprint, the third largest US long distance carrier, has assets including local phone holdings and the development plan for a national wireless system. A merged C&W-Sprint would have annual revenue over $25 billion, stock valuation of $35 billion, 90,000 employees, and C&W's extensive networks in the UK and Asia. C&W has also held consultations with AT&T, and Bell Atlantic-Nynex. France Telecom and Deutsche Telecom each purchased 10% of Sprint in 1996 for a combined $3.7 billion.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
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