SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report May 29, 1998
(Date of earliest event reported) (May 28, 1998)
MCI COMMUNICATIONS CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-6547 52-0886267
-------------- ---------------- -------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1801 Pennsylvania Avenue, N.W., Washington, D.C. 20006
------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (202) 872-1600.
<PAGE>
PAGE 2
Item 5. Other Events.
On July 15, 1998, MCI Communications Corporation ("MCI") announced that
it had entered into a letter agreement (the "Letter Agreement") with Cable &
Wireless plc ("Cable & Wireless") to sell its Internet service business (the
"iMCI Business"). The Letter Agreement supersedes the letter of intent (the
"Letter of Intent") between MCI and Cable & Wireless to sell MCI's Internet
backbone service business which was announced on May 28, 1998. The purchase
price for the iMCI Business is $1,750,000,000. The completion of the transaction
is subject to certain conditions precedent, including the receipt of the
approval of the Department of Justice, and satisfaction of the conditions
precedent to the merger of MCI and WorldCom, Inc., which includes the receipt of
approval of the Federal Communications Commission. The Letter Agreement will
terminate if such governmental approvals are not received by December 31, 1998.
The Press Release related to the Letter of Intent was previously filed
with the Securities and Exchange Commission on May 29, 1998 pursuant to a
Current Report on Form 8-K (the "Form 8-K"). The press release filed with this
Amendment to the Form 8-K as Exhibit 99(a) supersedes the press release set
forth in Exhibit 99(a) to the Form 8-K.
Item 7. Exhibits.
Exhibit No. Description
- ----------- -----------------------
99(a) Press Release issued by the Company and Cable &
Wireless plc on July 15, 1998.
<PAGE>
PAGE 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MCI COMMUNICATIONS CORPORATION
/s/ Edward G. Freitag
------------------------------
Edward G. Freitag
Assistant Secretary
Date: July 21, 1998
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------------------
99(a) Press Release issued by the Company and Cable &
Wireless plc on July 15, 1998.
Exhibit 99(a)
CABLE & WIRELESS TO BUY MCI'S INTERNET BUSINESS
Agreement Follows Antitrust Clearance from U.S. Department of Justice
Jackson, MS and Washington, D.C. - July 15, 1998 - MCI and WorldCom today
received final approval from the U.S. Department of Justice (DoJ) to complete
the MCI WorldCom merger. Following the decision from the DoJ, MCI signed an
agreement to sell its Internet backbone facilities and wholesale and retail
Internet businesses for $1.75 billion in cash to Cable & Wireless.
"We have fully addressed the antitrust concerns of the U.S. Department of
Justice and look forward to gaining final regulatory approval from the Federal
Communications Commission," said Bert Roberts, MCI's chairman. "We are eager to
begin delivering the many benefits of the MCI WorldCom merger -- growth for our
shareholders, innovation and value for our customers, and new opportunities for
our employees."
Terms of the Cable & Wireless Transaction
The sale of MCI's Internet assets includes all associated traffic, revenue and
backbone facilities. MCI's Internet business is projected to have revenue of
approximately $375 million this year. Cable & Wireless will acquire the
following Internet assets:
- U.S. Nationwide Internet Backbone - the backbone, comprising
all of its 22 domestic nodes, 15,000 interconnection ports,
more than 40 ongoing peering agreements, routers, switches,
modems, e-mail servers and other equipment dedicated to its
support. The network features high-speed dedicated access as
well as toll-free nationwide and local dial-up access for more
than 300 points across the U.S.
- Dedicated Access Customers - Cable & Wireless will gain 3,300
major dedicated Internet access corporate accounts.
- Internet Service Provider (ISP) Customers - Cable & Wireless
will acquire approximately 1,300 ISP customers, including 130
International Directly Connected Customers (IDCs) in more than
75 countries. ISPs contract to provide Internet, billing and
customer service to business and mass market
users.
- Dial-Up Business - this business provides nationwide dial-up
Internet access for more than 250,000 consumers and 60,000
business users.
- Web Hosting and Managed Firewall Services - these businesses
include more than 100 corporate accounts and associated
servers.
<PAGE>
MCI and Cable & Wireless have agreed to terms that enable Cable & Wireless to
fulfill all contractual arrangements and to continue MCI's high standards of
customer service. MCI, for example, has contracted with Cable & Wireless to
provide underlying transport services for Cable & Wireless's Internet backbone
for up to five years.
MCI and Cable & Wireless have also agreed to terms to facilitate the continued
growth and long-term viability of these Internet businesses. These terms include
non-compete agreements for transitioning accounts of 24 and 18 months for
wholesale and dedicated access retail customers, respectively. In addition,
approximately 1,000 MCI employees -- with expertise in engineering, sales,
customer service, marketing, operations and administrative support -- will
transfer to Cable & Wireless.
The agreement with Cable & Wireless is contingent upon the final regulatory
approval of the MCI WorldCom merger. MCI and WorldCom expect to complete their
merger this summer following FCC approval.
The Internet backbone services business and its ISP customers were the subject
of an agreement between Cable & Wireless and MCI announced on May 28, 1998.
Today's new agreement includes the transfer of MCI's retail Internet customer
base.
Impact on MCI Customers
MCI's agreement with Cable & Wireless has no immediate impact on MCI's Internet
customers. They will continue to receive Internet service from MCI until the
close of the MCI WorldCom merger when the agreement with Cable & Wireless
becomes effective. At that time, they will become Cable & Wireless Internet
customers.
In addition, the agreement with Cable & Wireless has no impact on MCI's
non-Internet customers, the non-Internet portions of MCI's Internet customer
contracts, or its portfolio of business and consumer communications services.
All MCI customers will continue to receive from MCI its full set of non-Internet
services, including fast-growing data services such as frame relay, private
line, ATM and SONET, as well as local and long distance voice, and information
technology services from MCI Systemhouse.
MCI WorldCom will offer a full suite of Internet services to their customers
upon completion of their pending merger.
MCI WorldCom Merger
MCI and WorldCom agreed to divest MCI's Internet assets in an effort to expedite
the completion of the MCI WorldCom merger. Following approval from the Federal
Communications Commission, expected soon, the companies will begin to realize
the growth opportunities presented by its unique position in the fastest growing
segments of the global communications market. MCI WorldCom will be the first
"local to global company," capable of delivering advanced voice and data
communications services entirely over its own facilities worldwide.
<PAGE>
Cable & Wireless is one of the world's leading providers of global
telecommunications services with revenues of approximately $12 billion annually.
Its businesses provide 17 million customers in 70 countries with a complete
range of international, domestic and mobile communications. Cable & Wireless is
the world's third largest carrier of international traffic, provides mobile
communications in more than 30 countries and operates the world's largest
cableship fleet.
MCI, headquartered in Washington, D.C., is a leading provider of local-to-global
communication services to business, government and residential users. The
company's fast-growing portfolio of advanced data and IT services accounts for a
quarter of MCI's approximately $20 billion in annual revenue. MCI operates one
of the world's largest and most advanced digital networks, connecting local
markets in the U.S. to hundreds of locations worldwide. MCI has agreed to merge
with WorldCom, one of the world's fastest growing communications companies. The
merger will create MCI WorldCom, a company uniquely positioned in the U.S. local
and long distance markets as well as the global data and Internet markets.
