WorldCom profits reveal weak link to be axed

NEWS Almost all the company's revenues and profits were significantly up on the same period last year. The exception was its consumer and wholesale broking business. It is this arm, where revenues fell 3 per cent to $2.9bn, that WorldCom plans to spin off, using the same tracker-stock mechanism that AT&T announced yesterday for its consumer long-distance arm. Matt Hanrahan, analyst at Bloor Research, said: "Voice is just becoming cheaper and cheaper. Data and internet is where the money is now. You look at the fact that data sales are up 23 per cent and internet sales are up 51 per cent - they're going to concentrate on that." WorldCom is the world's biggest internet carrier, but its internet revenue growth has slowed to only 29 per cent with revenues of almost $1bn. Data, internet and international revenues were $4.5bn, almost half the total $10bn for the quarter. International sales are up 42 per cent. There is a feeling that there is some way to make money out of the domestic long-distance market in the US. But neither AT&T nor WorldCom has yet discovered the secret. In the meantime it has become an increasingly cut-throat market with tremendous capacity. WorldCom will be announcing its detailed plans for reorganization 1 November.