Takeover frenzy in telecoms: the case of MCI WorldCom.: Part one: competitive strategies

On 1 October 1997, WorldCom proposed the highest value corporate bid in US history for fellow-telecommunications company, MCI Communications. Later, the bid was raised still further. But WorldCom was not the only bidder; for nearly a year BT had been involved in merger discussions with MCI which had reached an advanced stage. In November 1997 GTE Corporation put in a competitive bid. Part One of this Case Study looks at the background of domestic US, UK and international competition in telecoms, and the regulatory, technological and strategic features of the industry which underlie it. MCI's strategy as a major telecoms provider in the US is examined, together with the competitive strategies adopted by the suitors for its hand, WorldCom, BT and GTE. The strategic advantages and disadvantages of each of the proposed combinations with MCI are weighed up.