Telecom Mergers: What's the Big Deal?

It's the battle of the telecom mega-mergers: Who can grab the most headlines? Sunday's big splash was the joint venture between AT&T and British Telecom, which will merge their international operations into one $11 billion behemoth. But that triumph has been trumped by a possible Baby Bell deal: Monday's revelation that Bell Atlantic and GTE have been talking about getting together for the past two months. If the two local carriers do hook up this week, as senior executives have suggested, we'll have a new telecom giant on the block -- one with $53 billion in revenues, second only to Ma Bell herself.

This is, of course, all in line with the recent rush to the altar of telecom conglomeration. But as with all marriages, the smiles and public appearances conceal a basic imbalance between the partners. Take the AT&T-BT deal. The Brits bring $1.4 billion in assets and international operating revenues of $2.1 billion, as opposed to their more well-endowned mate's $2 billion and $3.1 billion, respectively. No wonder the partnership will be consummated in the U.S. As for Bell Atlantic and GTE -- does anyone doubt that the former, which swallowed NYNEX last year, will be dominant in this pairing? No doubt that's the cause of GTE's last-minute jitters.