MCI WORLDCOM AND SPRINT SET RECORD STRAIGHT

News Bureau Media Relations 800-644-NEWS Investors Scott Hamilton 601-460-4981

Washington, D.C., March 20, 2000 – Nearly every American will be able to choose among three or more facilities-based long distance networks – in addition to hundreds of resellers -- even after the MCI WorldCom-Sprint merger closes, the companies told the FCC today. In their formal response to comments on the merger submitted to the Commission by outside parties, MCI WorldCom and Sprint provided data showing that more than 98% of the U.S. will be served by at least three facilities-based carriers, with more than 90% served by four or more such carriers.

“These results clearly demonstrate that emerging carriers have become a major force in the traditional long distance market,” said Michael H. Salsbury, MCI WorldCom general counsel. “Even as the telecom market overall continues its shift to an ‘all-distance’ model, competition for long distance customers will continue to accelerate.”

MCI WorldCom and Sprint demonstrated to the FCC that it is price, not brand, which prompts consumers to switch long distance carriers. This finding counters claims submitted to the FCC by monopoly Bell operating company SBC, the companies said.

Customers Exercise Freedom to Choose

A study submitted with the companies’ joint reply comments shows that MCI WorldCom and Sprint customers switch disproportionately to emerging carriers rather than between the two companies. In fact, more than a third of customers that switched from MCI WorldCom or Sprint in a 12-month period switched to an emerging carrier, the companies said.

MCI WorldCom and Sprint point out that the ability of emerging carriers to compete is more than theoretical, as demonstrated by the investment of companies like Qwest, Broadwing, Level 3, Williams and Frontier in nationwide networks. These carriers, and those that resell their services, have already captured a significant share of the traditional long distance market, said MCI WorldCom and Sprint.

“By completely ignoring the role of the emerging carriers, our critics have presented a grossly skewed snapshot of competition in the long distance market,” said J. Richard Devlin, Sprint executive vice president and general counsel. “Consumers and business customers alike look for the best deal and service, regardless of whom the carrier is.”

MCI WorldCom and Sprint also emphasized that emerging carriers are increasingly bidding for and winning high volume, long-term contracts for larger business customers.

Bell Long Distance Entry on the Rise

Claims by critics that widespread Bell company entry into the traditional long distance market might not come soon enough to hold down possible price increases are wrong, MCI WorldCom and Sprint said.

In addition to being authorized to provide long distance in New York and applying to do so in Texas, Bell companies have announced near-term plans to enter states that account for a huge share of the long distance market, the companies noted. Reductions in long distance prices by Bell companies in those states will compel traditional long distance carriers to continue lowering their rates even further. And because of federal requirements, pricing pressure in just one state leads to nationwide reductions, said MCI WorldCom and Sprint.

Various Bell companies have identified 12 states where they plan to seek long distance authority by fall of 2000 – approximately the time MCI WorldCom-Sprint merger will close. Combined with New York and Texas, these states account for more than half of U.S. long distance traffic and lines, MCI WorldCom and Sprint pointed out. Now that the FCC has provided the Bell companies with a “roadmap” to gaining long distance entry through its recent approval of Bell Atlantic-New York’s application, there is every reason to expect that Bell company expansion into the long distance market will accelerate.

Internet Backbone Market will Continue Strong Growth

MCI WorldCom and Sprint also submitted extensive information to the FCC demonstrating the highly competitive nature of competition among Internet backbone providers. Economic analyses show that fiber capacity is increasingly available, allowing easy access by competitors to the market. Further, market conditions prevent any company from dominating the backbone market, MCI WorldCom and Sprint stated.

While information submitted to the FCC shows that backbone providers will continue to compete vigorously after the merger is completed, the companies also acknowledged once again their commitment to work with regulators who might still have concerns over the addition of Sprint’s Internet backbone assets to those of MCI WorldCom.

The MCI WorldCom-Sprint filing also makes it clear MCI's spinoff of Internet assets as a condition of its merger with WorldCom demonstrates that a backbone business can be successfully divested. The divestiture succeeded in transferring MCI's substantial Internet assets to a competing service provider, Cable & Wireless, that has used them to enhance its position as an effective, facilities-based alternative to MCI WorldCom and other major providers of Internet backbone services, MCI WorldCom and Sprint said.

MCI WorldCom (NASDAQ: WCOM) is a global leader in "all-distance" communications services with operations in more than 65 countries. Revenues in 1999 were $37 billion, with more than $15 billion from high-growth data, Internet and international services. MCI WorldCom and Sprint have announced a merger agreement, which the companies expect to close in the second half of 2000 after regulatory and shareholder approvals. For more information go to http://www.wcom.com.

Sprint is a global communications company – at the forefront of integrating long distance, local and wireless communications services. Sprint built and operates the United States’ first nationwide all-digital, fiber-optic network and is a leader in advanced data communications services. Sprint has $17 billion in annual revenues and serves more than 20 million business and residential customers. Sprint is traded on the NYSE under FON and PCS. For the latest updates on Sprint, check http://www.sprint.com.

Additional Information

View Recent Press Releases