WHY WORLDCOM WILL SURVIVE

It seems to me that a lot of focus on WorldCom these days is concentrated on a small handful of individuals who according to the press, at best expressed poor judgment, at worst, acted in a criminal manner that has led to investigations that will have a long term negative impact on a truly great company. Granted John Sidgmore, Scott Sullivan and Bernie Ebbers are in the spotlight right now, and we all know it is going to be very hot under those lights. Aside from these individuals, who is WorldCom? We should also ask what is WorldCom? Over the last two weeks, I have listened to media pundits who think they have a bead on WorldCom, but I have yet to hear any one get it right, or even come close. WorldCom isn't a rag tag group of accountants who have been caught with their hands in the cookie jar. They aren't a deceiving cadre of people out to hide in the mire of accounting gobbledy&^&*. WorldCom is so much more.

It is two Frame Relay networks made of 3000+ Frame Switches. It is two ATM networks made of 3000+ ATM switches. It is an Internet Backbone made of 1500 Juniper M40/M160/Cisco GSR Routers. It is thousands of access switches and routers to the Internet Backbone. It is 50% of all internet traffic globally. It is 2500 Internet Access PoPs. It is ALL of the Metropolitan Area Access points where all Internet Service Providers Peer. The WorldCom MAEs carry virtually all of the Internet Traffic in the World.

It is hundreds of massive voice switches carrying millions upon millions of calls every day.

It is a SONET network made of 10s of Thousands of SONET elements in 128 counties.

It is millions of square feet of hosting facilities capable of holding 375,000 servers.
It is dial access for 50% of all AOL traffic.
It is dial access for virtually all of CompuServe traffic.
It is millions of T-1 to OC-48 leased line circuits.
It is 30 Billion dollars in Annual Revenue.
It is a company with 3.0 billion shares out on the street.
It is 103 Billion, that's right, 103 Billion dollars in capital assets. That is 10,300 Times bigger than Yipes! That is more than the GNP of most countries in the World.

It is 63,000 dedicated professionals who bring the most reliable SONET, Fame Relay, ATM, Internet and Hosting services to the market place.

It is 20 million long distance voice customers.
It is 20 million AOL and CompuServe Dial Access customers.
It is 300,000 Internet Access Customers.
It is 100s of thousands of ATM and Frame Relay customer sites.
It is 100s of millions of voice customers passing through local Bell Companies using WorldCom SONET rings.
It is 75 million users and computer systems accessing the Internet.
It is individuals who have lead the research efforts that have brought ATM, Frame Relay and the Internet itself to our doorsteps.

It is the heart and soul of virtually every person in the United States who has placed a phone call or sent an Internet Instant message to a loved one.

Everything about WorldCom is tangible in a huge way. WorldCom has global impact.
It is not a simple spigot that can be turned off. It cannot go away. Contrary to some of the opinions of the media hyenas, the World will not be a better place if WorldCom goes away. Many of their comments simply prove that they just don't get it. They don't get who or what WorldCom is. Pass this along. Maybe, in some way, it will help them understand. We all need to help WorldCom get through this. WorldCom is a good thing...pass the word.

The fate of Worldcom will be decided by the bankruptcy courts and Worldcom's bond-holders. The current stock will be even more worthless when it is wiped out and new shares are issued to it's debtors. MCI will survive as an intact unit and will be sold off to one of the baby bells. It's remaining assests will be sold off to the highest bidder.

Telecom is a scary place to be right now, and it is going to get worse before it gets any better. This isn't the first industry to have a big build up and a big bust. Railroads, automobiles, pocket calculators....they all rode the same trail...the same one that the surviving telecoms are traveling now.

I agree, WorldCom will NOT survive in it's present state. It will go Chapter 11, and re-emerge as something much more leaner, with a much more specific business model.

I look to see much of the non-UUNET and non-MCI assets being sold off first. Of course, I don't have access to the numbers that Sidgmore does, so my statements are pure speculation.

If WorldCom can survive with MCI and UUNET, I'd say the next step would be a massive consolidation of the units, removing repetative units within the two groups. Many reorganizaitons of the business structure, and the elimination of many of the already top-heavy management within the company. Not just executives, but VP's, Directors, and Senior Mangers.

If WorldCom can not survive with both MCI and UUNET, my money would be on the selling of MCI. While both are money makers, the UUNET division has continually displayed greater growth and income levels then MCI. Plus, UUNET has strong 'personal' ties with Sidgmore, as it was his baby he grew before Bernie and Co. destoryed it. Maybe Sidgmore can deal selling the MCI customer base while keeping network assets, similar to what was done with the CompuServe deal between WorldCom and AOL, further strengthening the UUNET division. Sidgmore has made repeated statements regarding taking WorldCom back to 'core business' and refocusing on this. Sidgmore is most experienced with data communications, not telco.

Without MCI or UUNET, WorldCom is toast. Bernie Ebbers turned WorldCom into a collection of companies that were no longer able to be industry leaders in their area of specialty, instead making it a company that did many things at mediocre at best. I suspect Sidgmore is going to bring WorldCom back to doing one or two things as it's business core, so that it can once again regain it's ability to become an industry leader.

The other thing Sidgmore MUST do if the company is expected to survive is clean house. Too many of Bernie's hand picked cronies still around, who did business his way. Perhaps he's keeping his cards close to his chest right now, waiting for the internal investigation to complete to give him the ammunition he needs to do this. And not only at the executive level, but up and down the entire chain of command. Too many lower level management people have taken their lead from Bernie's cronies and have the same lack of morales when running their units.

I don't foresee WorldCom being able to avoid Chapter 11. Which is going to be a real killer to present investors as well as employee's who were recently laid off and won't get their severance packages. But, Chapter 11 is not the end of the world as far as a company being able to survive. Many companies have done it, and came out a survivor. The key is going to be what Sidgmore does during this time to make the company viable. He can take the ball and run with it, or drop the ball entirely.

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