[ih] History of Tier 1 Networks

[Olivier MJ Crépin-Leblond]

On 28/04/2026 14:03, Vint Cerf wrote:
> We were planning to merge with BT but around Feb 1998, as I recall, 
> the BT Board dropped its offer by about 20% and the MCI Board accepted 
> the Worldcom bid instead. 

Indeed. What happened was that BT already owned 20% of MCI.
In July 1997 MCI announced a profit warning on their US local telephone 
losses doubling to $800m. This signalled to the BT Board that perhaps a 
better deal could be achieved - downplaying the golden opportunity to 
acquire MCI's Internet business that had huge potential. So BT lowered 
its offer for an MCI valuation of around $24bn.

WorldCom was the super agressive operator. From being next to nobody a 
year earlier, they had just acquired UUNET. and MFS. Thus the news came 
as a shock in October that they'd make an all-share offer at $30bn, 
later increased to $37bn when GTE entered the arena with a rival all 
cash offer.

At that time, around Nov 1997, it was clear BT was not willing to follow 
suit with these numbers. Given the contraints BT had around reporting 
its investments and the scrutiny it was subjected to, it would have been 
challenging to come out with more billions out of a hat - especially a 
few months after the Tony Blair Labour government was elected, which 
complicated matters further...

Best,

Olivier