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Yankee Group Research Proves AT&T and MCI to Be the Bells' Largest Competitors in the Wholesale Market

Posted on: Thursday, 22 September 2005, 12:00 CDT

A private report by The Yankee Group shows that AT&T and MCI together account for nearly 20 percent of the wholesale metro private line market, XO Communications charged in a filing with the Federal Communications Commission.

The January 2004 Yankee Group study, "Wholesale Communications Strategies," was commissioned by XO more than a year before SBC and Verizon announced their plans to acquire AT&T and MCI. As pure market research, the study presents a time capsule view of the wholesale private line market as it existed well prior to the current debate over the mergers, and clearly demonstrates the important role of AT&T and MCI in the wholesale market.

Based on overall market data and interviews with wholesale buyers in the third quarter of 2003, Yankee Group researchers found that AT&T and MCI each earned in excess of $1.0 billion in revenues from wholesale loop and transport circuits. After the RBOCs, MCI was the largest player in the wholesale space, with 10 percent market share. AT&T was the second largest competitor, with 9 percent of the market. Together, AT&T and MCI accounted for nearly one-fifth of the $13.0 billion private line market in 2003.

"Throughout the review of these proposed mergers, the applicants have denied the truth about AT&T's and MCI's importance in the wholesale market," said Heather Gold, Senior Vice President of Government Relations at XO. "The Yankee Group data proves beyond any doubt that AT&T and MCI are the biggest competitors to the Bells. If the FCC permits the largest incumbent local exchange carriers - SBC and Verizon - to merge with their largest competitors in the local wholesale market, customers will suffer dramatically."

About XO Communications

XO Communications is a leading provider of national and local telecommunications services to businesses, large enterprises and telecommunications companies. XO offers a complete portfolio of services, including local and long distance voice, dedicated Internet access, private networking, data transport, and Web hosting services as well as bundled voice and Internet solutions. XO provides these services over an advanced, national facilities-based IP network and serves more than 70 metropolitan markets across the United States. For more information, visit www.xo.com.

Source: Business Wire

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