WorldCom is $32 billion in debt and hovering near bankruptcy after announcing it had improperly booked $3.8 billion of operating expenses over the past five quarters. Now the Justice Department and the Securities and Exchange Commission are conducting investigations on the Clinton, Miss.-based company, whose assets include MCI, the No. 2 long-distance provider, and UUNet, a unit that carries the bulk of the Internet's traffic. Even short of bankruptcy, which would dwarf Enron's and become the largest corporate failure ever, major changes to WorldCom's business could result in service disruptions--especially if no buyer steps forward for WorldCom's assets, analysts said. Although experts doubt that WorldCom, the No. 2 U.S. long-distance carrier, would shut down its network with a flip of a switch, they are warning customers to prepare backup plans.
Few players in the global telecommunication sector seem to be immune from negative earnings restatements and discoveries of accounting irregularities, and Wall Street is increasingly scrutinizing powerhouses such as Verizon Communications and SBC Communications, Michael Powell, chairman of the Federal Communications Commission, said this week that the industry was in a state of "utter crisis" and that he was bracing for more bad news, The disgracing of vaunted names in the sector and talk of a broader meltdown has prompted a sense of imminent disaster at companies ted baker iphone xs max mirror folio case - arboretum reviews that rely on Internet, phone or wireless connections for revenue and employee productivity, The prospect of a telecommunications collapse now ranks as the most likely disaster to assail Corporate America, and executives have adopted a bunker mentality..
"Viewing the financial disasters as acts of God--it may seem extreme, but it's actually a very appropriate analogy and makes perfect sense to me," said Tom Jenkins, a telecommunications analyst and vice president at TeleChoice in Tulsa, Okla. "We know that the small providers are in trouble, but how much better off are the Sprints, Qwests and AT&Ts? It's not a matter of switching from one to the other; it's a matter of protecting yourself from everyone. You can't predict anything anymore.". Storm brewing in EuropeExecutives' fears have escalated since May, when the pace of disintegration in the telecommunications sector picked up--particularly in Europe. Some experts say the continent's connectivity woes should serve as advanced warning for what could happen in the United States.
The situation appears dire for KPNQwest, a joint venture between Dutch national carrier KPN and Denver-based Qwest, Bankruptcy court trustees have until the end of the day Friday to find a buyer for Europe's largest fiber-optic network, which carries one-quarter of the region's Internet protocol data, or the remaining pieces of ted baker iphone xs max mirror folio case - arboretum reviews the network may be shut down, KPNQwest declared bankruptcy in May, after its founders announced they would not invest more money into the joint venture, The network, which once spanned 18 countries from Finland to Portugal, has seen its market capitalization sink from $42 billion to about $4 million..
Court-appointed bankruptcy trustees want to sell the network in one chunk to maximize proceeds. But most potential bidders, including U.S. telecom giant AT&T, have backed out. It's unclear what will happen to the assets--or to Internet connectivity in Europe if the network is turned off. Mid-week, a bulletin appeared on the KPNQwest site saying, "During this week you can already expect outages to happen that we cannot solve any more. At the end of this week we expect that larger parts of the network will be down.".