Article Abstract:
United Telecommunications Inc will consolidate with its US Sprint Communications Co unit to cut costs, improve efficiency and facilitate response to the market. Realignment comes nine months after United Telecom bought a controlling interest in Sprint from GTE Corp. United has 80.1 percent of Sprint and holds options to acquire the rest. The realignment splits the business into long-distance operations and local operations. Telenet, Sprint's data unit, will take on a mission to expand voice and data operations. Telenet's data network functions, as well as marketing and sales, will be blended with Sprint's. United Telecom's stock fell $3.375 on Oct 10, 1989, after the company's 3rd qtr earnings report indicated that costs had not been controlled to the extent anticipated. On Oct 11, the company's stock closed at $82.75, down 50 cents, in trading on the New York Stock Exchange.
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Article Abstract:
MCI Communications Corp will purchase Telecom USA Inc for $1.25 billion, or $42 a share. Telecom is the fourth-largest long-distance carrier in the US. MCI is purchasing Telecom to supplement its mid-level business market and gain access to proprietary Telecom products, including its calling card and voice-messaging service. Telecom's 1989 sales were $713 million. MCI controls 12 percent of the long-distance market, with about $6.47 billion in 1989 revenue. With the acquisition, MCI will likely receive about 450,000 business customers in the South and Midwest. MCI earnings will be diluted by as much as five percent in the first year, but earnings should begin during the second year. The acquisition is seen as the first of many likely consolidations within the industry, which analysts deem necessary in order for companies to compete with AT&T.
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Article Abstract:
Tele-Communications Inc (TCI) is buying a 49.9 percent stake in Teleport Communications, a move that threatens phone companies and could pave the way for cable television companies to vie for greater communication power. Teleport manages private optical fiber communications networks in seven major US areas, handling phone traffic for major companies that transmit large quantities of voice and data messages. Telephone companies may try to provide video services over their networks while cable television companies attempt to offer phone services, despite the ban of cross-ownership under the 1984 Cable Act. TCI and Cox are both testing cable technology to see if it can support phone calls.
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