Oriental Group's stake in MCI Communications is a $1.5 billion business, of which Oriental Satellite Communications is valued at $1.15 billion. With such a big deal, Li Xuan naturally had to come to the United States in person to attend the final signing ceremony.

In order to maximize the net worth of Vostom Communications in order to obtain as much equity as possible in the merger with MCI, Vostomo divested hundreds of millions of dollars of debt prior to the transaction. You must know that the Oriental Group only spent $5 billion to acquire the entire RCA company, and the Oriental Communications Company is just a new company reorganized with a part of RCA's original aerospace business.

Therefore, this merger is definitely a very good deal for MCI. Because it can control a satellite communication company, it will play a crucial role in reducing operating costs and expanding its business in the next step! Not to mention that this communication company is also a high-quality asset with little debt and stable cash flow.

The Eastern Group valued it for $1.2 billion and injected another $350 million in cash, acquiring only 25% of MCI's shares. In other words, the total valuation of MCI's original assets is as high as $4.65 billion.

That's almost as high as it was before the crash, and if you look at MCI's current share price, the company's total market capitalization is only $3.8 billion. The willingness of the Eastern Group to accept the high valuation of MCI is definitely a major positive news for investors. So the next foreseeable thing is that the stock price of MCI will usher in a violent rise!

"Antitrust has not caused fatal harm to AT&T, but is more like pruning and pruning leaves for this bloated giant! The focus of the US Department of Justice split is on the local telephone business, splitting AT&T's local telephone business into seven companies.

However, although the new AT&T is not allowed to operate local telephone services, it has completely inherited the long-distance telephone business of the old company, as well as most of the assets of Bell Labs! Bell Labs has a large number of communication technology patents. Let AT&T be one of the world's largest suppliers of communications equipment!

Not only does AT&T rely on a strong network of infrastructure to suppress us, but it also makes huge profits from our orders for AT&T equipment. This puts us in a very disadvantageous position in the competition!" Hyde Walker, CEO of MCI, couldn't help frowning when he told Li Xuan about the company's biggest competitor.

The full name of AT&T is called American Telegraph and Telephone Company. Its predecessor was the Bell Telephone Company. By the time the entire Bell Group was forcibly dismantled under the Antitrust Act in 1984, it was already a large group with more than 20 subsidiaries. Dozens of companies in the entire Bell system have monopolized the telephone business in the United States for 60 years. According to the final judgment of the U.S. court, AT&T is no longer allowed to use the name "Bell" after the dissolution.

"Mr. Walker, I have a proposal that I don't know if it will work? MCI should reach a tacit agreement with other companies in the industry such as Sprint to exclude AT&T from equipment procurement in the first place. As a result, AT&T's market share in the field of communication equipment will decline rapidly.

And capital is always profit-seeking, and Wall Street investors will definitely ask AT&T in order to win our orders. The department responsible for equipment manufacturing was separated.

Once the equipment manufacturing department is separated from AT&T, AT&T will not be able to support the large-scale investment of Bell Labs, so Bell Labs will inevitably be split up!

The reason why the entire Bell system has been able to monopolize the U.S. communications market for more than half a century is mainly because it has formed the optimization of the whole industry chain from the most upstream technology research and development, to the midstream equipment manufacturing, and then to the downstream communication market competition! Then its deterrent power will be reduced by several notches in an instant!" Li Xuan said lightly.

Bell Labs is arguably the most successful private laboratory in the world, having produced many Nobel laureates. In the whole United States, only IBM Labs can compete with Bell Labs. This is also the most core asset of the entire AT&T company.

In another time and space, AT&T began to decline, not because of the antitrust split of the US Department of Justice, but because of its own split. In 1995, AT&T voluntarily split into AT&T, which was responsible for telecommunications, Lucent Inc., which was responsible for equipment manufacturing, and NCR, which was responsible for computer manufacturing.

The original Bell Labs was also split into two, and the half of the one that belonged to Lucent inherited the name of Bell Labs. The other half, which was assigned to AT&T, was renamed Shannon Laboratories.

After the split, Lucent's operating performance did improve by leaps and bounds. But it was eventually hit hard by the dot-com bubble of 2000. Before Li Xuan's rebirth, Lucent had already been acquired by the French company Alcatel. At its peak, Bell Labs, which had more than 20,000 scientific researchers, was almost an empty shelf.

The split AT&T company fared slightly better than Lucent. After all, its monopoly position in the core long-distance telephone business is formed by relying on decades of tireless huge investment in basic communication networks, and it is difficult for other competitors to shake it.

However, under the impact of the future Internet wave, the status of the telephone in information communication has been declining. AT&T is still one of the largest telecom operators in the United States, but it has long since lost its strong position as the hegemon of the U.S. telecommunications industry in the 80s. Especially in the emerging field of mobile communications, AT&T has even lost the top spot.

Li Xuan's suggestion made the CEO of MCI fall into thought, and Oriental Group now holds a 27.5% stake in MCI, becoming the company's largest shareholder. Eastern Group will occupy three seats on the re-elected seven-member board of directors and will naturally be involved in MCI's future strategic decisions.

However, according to the previous commitment made by Oriental Group, as a major shareholder, it will continue to give sufficient trust to the original management to avoid the company's business turmoil caused by the change of shareholding.

But in any case, Hyde Walker, as a professional manager, knows very well that the man in front of him is the key person who will determine whether he can continue to sit on the CEO throne of MCI in the future. (To be continued.) )