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 Technology Stocks : Teleport Communications Group (TCGI)

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To: Sauron who wrote (72)12/8/1997 6:17:00 PM
From: Rashe W. Stephens IIIRead Replies (1) of 90
 
Still here. Nice to see someone is still out there.

In my other postings I (like tons of others) speculated it would be AT&T acquiring TCG. Hadn't heard that they had canceled meetings for tomorrow. Thanks for the info.

A GTE bid wouldn't shock me. If you look at his MO, GTE's LEE has tried to emulate Worldcom's Ebbers on several fronts:

ú Worldcom buys capacity from QWEST; GTE buys into network
ú Worldcom acquires UUNET with the MFS acquisition; GTE buys BBN
ú Worldcom makes bid for MCI; GTE make bid for MCI
ú Worldcom buys Brooks Fiber; GTE buys ...

A analyst in a WSJ article discounted a GTE acquisition saying that GTE is more data oriented and has no real interest in local. I tend to disagree. If that were the case then why make a bid for MCI. Yes MCI has extensive Internet backbone and is a leader in data, but one of the real assets (though it's been a costly buildout) is the MCIMetro networks. Besides, I think that TCG is data oriented also. They have Cerfnet and some innovative data products in their Omni... line of data products and switched line of Prime... products.

IMO a real shortcoming of GTE, is their markets. While they are in some huge metros like LA, the bulk of their markets are Tier II & Tier III. TCG is in virtually every major metro capturing high-end business and government customers.

My only question is where would this leave AT&T. TCG is clearly the best CLEC left because of its national scope. Would they go after a WCII or Teligent & pursue the wireless track? Or would they make a bid for TCG also? If they want to be a player in local I don't think they have much choice other than the costly and timely option of going after a RBOC.

I'm long on TCG. I'd love to see a bidding war. Guess we'll have to stay tuned. We've been teased before.

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