So, following on from our opening roundup of the trials and tribulations surrounding our favorite multi-named carrier (see The Week at WorldCom), here are the latest developments at WorldCom/MCI/Whatever-it's-called-this-week:
The ban will be lifted if WorldCom demonstrates that it's dealt with the concerns the government has about its internal controls and business ethics.
However, if the ban lasts until July 1, 2004, the impact would be a whole lot greater: an $8 million hit in 2003, $105 million in 2004, and $137 million in 2005, which comes to a whopping net income shortfall of $250 million. The ban could last for anything up to three years.
Verizon claims the call data was somehow stripped of information to make it seem local, and the Wall Street Journal reported that Verizon had supplied investigators with emails sent between WorldCom and DataVon that implicate the two companies. Naturally, all the parties named are denying any involvement in wrongdoings.
It seems we'll have to wait until Roscitt actually checks into his WorldCom desk before any details of golden handshakes/parachutes/showers are revealed. The operator's press release quotes WorldCom CEO Michael Capella as follows: "He [Roscitt] knows our customers and our business and will immediately fit with MCI's new culture -- one focused on customer service, innovation and integrity."
Yankee's analysts say the countless allegations against WorldCom could be "little more than a determined effort by MCI's competitors to disrupt its bankruptcy reorganization," and that "at the core of the fraud allegations is the legal practice of least cost routing, which is commonly used by all carriers in the industry including AT&T." How very reasonable!
So, how have the week's developments influenced the Big Question of whether MCI/WorldCom/Whatever should be liquidated or resuscitated?
Since last week, the number of people that have taken Light Reading's Research Poll on the topic has risen to 391, from 243. Sentiment appears to be swinging in favor of liquidation. 63 percent of respondents now say this would be the best outcome for the telecom industry as a whole, compared to 58 percent last week.
To take the poll and see the latest results, please click on this link.
— Ray Le Maistre, International Editor, Boardwatch