Interest Perks Up In MCI Under New Stock Symbol

MCI's stock began trading on the Nasdaq Stock Market Wednesday, sparking some interest in reevaluating the beleaguered telecommunications firm.

Best known for its consumer long distance telephone operation, MCI has been hinting ever since it emerged from bankruptcy earlier this year that it favors exiting that business. However, there are some parts of MCI that would be attractive to Leucadia, which announced its takeover bid for MCI earlier this week, or another acquirer, according to one telecommunications analyst.

"The real shining star in MCI," said Pete Wilson, president and CEO of Telwares Communications, "is its prowess in the enterprise market. This would appeal to a RBOC (former Regional Bell Operating Company) or to a foreign carrier."

For now, the focus is on Leucadia, the New York-based investment group that has filed for regulatory permission to buy a controlling stake in MCI. Leucadia already controls WilTel Communications, formerly called Williams Communications Group Inc. Other suitors are likely to bid for MCI or for pieces of the company.

Wilson said MCI would be particularly attractive to any of the nation's four RBOCs -- BellSouth, Qwest, SBC, and Verizon."But they won't want MCI's long distance," he said. "MCI and AT&T have conceded defeat in the long distance consumer market. The RBOCs are going to take their long distance away. But the RBOCs aren't winning the enterprise battle."

Conversely, he said because the RBOCs continue to fare poorly in facilities-based enterprise markets, that segment of MCI would likely represent a strong attraction for a RBOC, or even a foreign carrier interested in increasing presence in the U. S. market. "MCI could be sold off in pieces," said Wilson.

Wilson estimates that MCI and AT&T combined control from 80 to 85 percent of the facilities-based enterprise communications market.

Another "shining star" in MCI is its Internet backbone best represented by its UUNET core. "This is a key asset," said Wilson, "and it's a global asset."

Although additional suitors for MCI haven't surfaced as yet, one investment banking firm, Guzman & Co., anticipates a contest for the telecommunications firm. Guzman issued a research note stating, "Leucadia starts the bidding war for MCI."MCI's stock under its new MCIP symbol was up slightly in afternoon trading Wednesday. That followed a 17 percent jump earlier in the week after it was announced that Leucadia was interested in acquiring the firm.