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Contractions Continue
SBC Communications will cut “several thousand” jobs and reduce capital spending by 20 percent, after announcing that its third-quarter net income had dropped to $2.07 billion, or 61 cents per share. BellSouth says its net income was off 99 percent, and that it will pare 3,000 jobs. Nortel Networks reported a $3.5 billion third-quarter loss on revenue of $3.7 billion.
Qwest Ups Stake
Qwest Communications International will boost its stake in KPNQwest to 47.5 percent and KPNQwest will buy the backbone assets of troubled Global TeleSystems in a preplanned bankruptcy filing, creating Europes largest data and Internet service provider. When the deals close, KPNQwest will have a 60-city, 15,600-mile fiber-optic network.
A Sweet Offer
No. 2 satellite television provider EchoStar Communications is trying to sweeten its offer for its larger competitor by adding cash to its previous all-stock bid for DirecTV. EchoStar is reportedly looking for a $5.5 billion loan that would allow it to meet General Motors demand that at least $5 billion of any bid for Hughes Electronics, the GM unit that owns DirecTV, be in cash.