Why Telecom's Odd Couple Is Trying So Hard

At a retreat in northern Virginia, a half-dozen executives from British Telecommunications PLC and MCI Communications Corp. huddled in early September. Just weeks after the two phone companies formalized a $5.3 billion alliance, they were thrashing out a plan for a new joint venture. As they got deeper into their discussions, they realized just how difficult their task would be. Worldsource, a competing alliance led by American Telephone & Telegraph Co., is also aimed at offering multinational corporations global voice, data, and video networks. AT&T's recent deal to buy McCaw Cellular Communications Inc. furthers the giant's reach. While the MCI and BT execs size up that 1,000-pound gorilla, "we have to sit down and design a new company," says Chris Earnshaw, who was named head of the BT-MCI venture last month.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.