MCI CEO Predicts Fast Merger Approval

BOSTON — MCI CEO Michael Capellas has set an ambitious
goal for completing his company’s $8.4 billion merger with Verizon .

“There’s a good chance it’ll close before year-end,” Capellas said Wednesday
during a keynote speech at SAP’s annual customer
conference here.

He quickly added that he couldn’t make a guarantee, but maintained that “the
target will be year-end and that’s what we will push forward to.”

The date is several months sooner than many industry-watchers predicted. The
size of companies and opposition from competitors and consumer groups
concerned about pricing pressure from the Verizon-MCI merger are two factors
that could prolong the process.

In addition, the proposed merger is taking place in the context of industry
consolidation. The SBC-AT&T will also be reviewed during the upcoming

Both mergers require the Federal Communications Commission and the U.S.
Department of Justice to sign off. The agencies may require the companies to
divest assets or customers in some markets.

In recent months, the duration of the regulatory review process was an issue
between Verizon and Qwest , which was also making an
aggressive play for MCI.

Qwest claimed a Qwest-MCI merger would win approval months sooner than a
Verizon-MCI combination, an assertion that was contested by Verizon. A
spokesman for Denver-based Qwest was not immediately available for comment.

Capellas used only a few minutes of his speech on his company’s pending
merger. Much of his time was spent detailing how SAP software helped his
company dig out from a horrendous accounting scandal. The effort to simplify
MCI’s systems continues.

“We consolidated six inventory systems into one, and we’re going to one
accounts receivable system,” he said.

Capellas allowed himself a moment of reflection, as well. No matter when the
Verizon merger closes, it’ll be a different company than the one he’s run.

“It’s been a pretty fun ride for me over the last couple years at MCI,”
Capellas said.

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