Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, June 13, 1993                   TAG: 9306110074
SECTION: BUSINESS                    PAGE: F-2   EDITION: METRO 
SOURCE: By Cindy Skrzycki
DATELINE: WASHINGTON                                LENGTH: Medium

MCI GROWS UP TO JOIN THE CLUB OF SUPER-TELECOMMUNICATIONS

In teaming with British Telecommunications PLC, the fourth largest international carrier, MCI has bought membership in an emerging club of super-telecommunications companies that is beginning to divide -- and serve -- the world.

For British Telecommunications, its $4.3 billion investment in MCI Communications Corp. gives it a slice of the world's richest telecommunications market. Almost half the world's multinational corporations, the biggest shoppers of telecommunications services, are headquartered in the United States.

More broadly, the alliance that the two companies announced June 2 represents one of the major efforts to build a global network that someday will have as many features and be as seamless as the systems that consumers are accustomed to in their home markets.

Just days earlier, AT&T announced its plans to circle the globe, forging alliances with carriers in Japan, Australia, Singapore, Canada and Korea.

The business these companies are after is the $10 billion multinational market, made up of firms that are demanding the conveniences of home -- simple dialing, faxing, electronic mail, video conferences, high-speed transfers of data and reliable service -- when they open factories and offices overseas.

"The goal is for each global player to have a distribution network around the world to connect up business customers," said Leonard Elfinbein, president of Lynx Technologies, which designs and installs telecommunications networks.

The result has been a whirlwind of partnerships crisscrossing Europe, the Far East and North America.

There are uniquely European alliances, such as Eunetcom, which consists of Germany's Deutsche Bundespost Telekom and France Telecom. There are regional plays such as those that MCI and AT&T separately firmed up recently in Canada.

Many of these alliances are so new and have been patched together so quickly that they conflict with, or supersede, old arrangements.

"This is wheels within wheels," said Ian Angus, president of Angus TeleManagement Group, located outside Toronto.

MCI, for example, is a partner in a group called Financial Network Association, whose members include Stentor and Mercury Communications Ltd. Mercury is owned by Cable & Wireless PLC, BT's biggest competitor.

MCI also is part of an alliance with France and Germany called Infonet. Its joint venture with BT raises the question whether MCI will be comfortable in that group for long because its new partner, BT, has a service that competes with Infonet.

"We literally have to sort it out in the weeks ahead," said Eugene Eidenberg, executive vice president of MCI. "We will have to figure out a way to ensure a transition." Stuart Mathison, vice president of strategic planning for Sprint International, which has one of the world's largest data networks, points out that nothing is set in stone, alliance or no alliance.

Mathison said "it's a little fuzzy" as to how exclusive AT&T's relationship will be with Japan and Singapore.

"Our Sprintnet partner is Singapore Telecom," he said. "And Japan's Kokusai Denshin Denwa (KDD) appears to be open to relationships with all other carriers." Both Asian companies are in the linkup fashioned by AT&T.

And the dance isn't over yet. Sprint Corp. said it's looking for a place in a consortium. Analysts speculate that the BT-MCI alliance may throw France and Germany into AT&T's arms, creating yet another superalliance. Cable & Wireless, which has a global empire of its own, is rumored to be the next to hook up with an American partner. And some think that MCI-BT will have to take in another partner to strengthen its presence in Asia.

"These are supercarriers," Daniel Briere, president of TeleChoice, a consulting firm in New Jersey, said of the alliances. "There's probably room for three supercarriers. Three is the magic number."

For customers, depending on their size, the rounds of musical chairs may bring increased competition, or at least a richer offering of services, industry analysts said.