America's No. 1 financial conglomerate

Chapter 538 Worldcom's Scheme

While Ernst was figuring out how to resolve the WorldCom issue, Wall Street and WorldCom were considering how to deal with China Telecom, the disruptor.

WorldCom headquarters, conference room.

At the head of the table, Bernard Ebers, dressed in a dark gray suit with his tie neatly tied at the collar, rested his hands on the smooth mahogany conference table.

No matter how formally he dressed, he always exuded the unchangeable air of a farmer.

The creator of the Worldcom empire was expressionless at this moment, his deep gaze sweeping over the executive team present like a lurking beast.

The meeting room was completely silent. More than a dozen powerful management members all lowered their heads, not daring to meet Ebers's extremely oppressive gaze.

Within this telecommunications giant with a market capitalization of over $80 billion, Ebers' authority had long transcended the scope of a conventional corporate manager, becoming an absolute authority that could not be questioned.

Ten years ago, he was just a nobody working for the Telephone and Telegraph Corporation, acting as a junior colleague.

As a Tier 2 service provider for AT&T, we undertake some scattered line maintenance and regional access services, and have no say in the industry landscape.

Through Ebers's almost obsessive expansion ambitions and iron-fisted methods, he spearheaded nearly 40 mergers and acquisitions of varying sizes over a decade, acquiring dozens of telecommunications-related companies and transforming WorldCom from an unknown regional service provider into an industry giant with a market value exceeding $800 billion and business covering major North American markets.

From the moment WorldCom acquired MCI, it was seen as AT&T's most threatening challenger. Some analysts even predicted that if WorldCom could maintain its current growth rate, it could surpass AT&T within three years and become the new king of the US telecommunications industry. In this business empire built by Ebers, he was the supreme ruler.

Not to mention the company's management, even the board of directors is just a figurehead, existing at his mercy.

Because the shareholders' support for him had reached an unconditional and fanatical level.

"I know you have some reservations about my decisions." After a long silence, Ebers finally spoke, breaking the deathly stillness in the room.

"You're all thinking, 'That's Ernst, not some nobody Worldcom can afford to ignore.'"

The group, heads bowed, exchanged a subtle, unspoken glance, and Bernard spoke their minds.

WorldCom is a giant, that much is undeniable.

With a market capitalization of over $800 billion, a communications network covering 28 states, and annual revenue exceeding $300 billion, it is enough to make it a dominant force in the telecommunications industry.

Even the head of such a giant company, who can look down on everything, still has to consider who his opponent is.

That's Ernst, after all. Any one of his companies has a prestigious reputation.

Google, in particular, which has recently attracted much attention from the capital market, has completed its internal restructuring and is pushing forward its roadshow. It is expected to officially list on Nasdaq early next year.

Google is currently the talk of the internet, with daily newspaper reports about it. Market analysts have valued Google at over $4000 billion, and it wouldn't be surprising if it dethroned Microsoft from its top spot.

That's a behemoth worth four hundred billion US dollars, equivalent to the combined market capitalization of five WorldCom companies. Such a difference in size makes it impossible for any rational person to easily regard Ernst as a rival.

Forcibly pulling such a tycoon to the opposite side of WorldCom is an unwise move.

Moreover, the other party is known for their ruthless methods and toughness.

Ebers put his hands down from the table and said firmly, "But I have to do it. It's not just to stop that guy from entering the telecommunications industry, but more importantly, it's to open up a key gateway to the New York market."

New York Market?

For any American telecommunications company, the New York market has irreplaceable strategic value.

This area is not only the most densely populated and commercially active region in the United States, but also the birthplace and core base of AT&T.

Since its founding in 1877, AT&T has built an impenetrable monopoly in the New York market by leveraging its first-mover advantage, firmly controlling everything from route coverage and customer resources to policy resources.

For over a century, countless telecommunications companies have attempted to challenge AT&T's dominance in New York, but all have ultimately failed.

Although the New York market is not dominated by a single company, the other telecommunications businesses are barely surviving.

Entering the New York market not only meant enormous commercial profits, but also symbolized a challenge from the new order to the old. Once Xianyang fell, the world would inevitably descend into chaos.

But what does this have to do with being Ernst's enemy?

The crowd reacted much more strongly this time. After exchanging glances, they all looked bewildered, and finally, they all looked at Bernard, who was in the lead.

"The only obstacle for mainland China's telecommunications companies to officially commence operations is the approval of telecommunications operating licenses."

His gaze swept over the crowd, finally settling on the man to his right. "I've had someone inquire and confirmed Navins's information. Continental Telecom and Lehman Brothers have signed a legally binding agreement. This high-speed data line connecting Wall Street and Chicago must be officially launched by the end of this year, or they will face up to double the amount in breach of contract damages."

At this point, Ebers's lips curled into a meaningful smile. "As long as we hold onto the telecommunications license, Ernst will inevitably have to sell Continental Telecom as a compromise, and then our opportunity will come."

The meeting room was silent for a moment, then someone finally spoke up quietly, "But if China Telecom operates under the guise of the Telephone and Telegraph Group, what will we use to block them?"

Telephone and Telegraph Corporation (TTC) owns 49% of Continental Telecom, and according to information brought by Navins, TTC could acquire all ownership of Continental Telecom in two years.

Based on this alone, many people believe that Ernst has no intention of entering the telecommunications industry, at least not now.

They have also investigated Bill's matter thoroughly. Now everyone knows that the reason Ernst established Continental Telecom and laid this dedicated line was to force Wall Street to comply.

So their offensive was fierce, but not to the point of being desperate.

If it's truly a fight to the death, it won't just be about the license; it will also involve the existing power lines. WorldCom will have to go bankrupt to pressure Ernst to dismantle them. WorldCom's actions are more like a warning, telling Ernst, "Go back to your internet domain; the telecommunications industry is over."

Therefore, regarding mainland telecommunications, the Telephone and Telegraph Corporation was even more nervous than Ernst.

Even if they lost everything, Ernst would at least have gained Bell Labs, while the Telephone & Telegraph Corporation would have suffered a complete loss.

Of course, this condition is based on the premise that Ernst would rather pay Lehman Brothers than sell Continental Telecom.

Even if mainland telecom companies fail to obtain licenses, the Telephone and Telegraph Corporation will have to find a way to avoid losing money.

It would be perfectly acceptable to have mainland telecommunications companies annexed by the Telephone and Telegraph Corporation (TTC), nominally becoming a subsidiary of TTC, and still be able to operate.

"Don't worry, even if the Telephone and Telegraph Corporation had such intentions, there's nothing they can do about it." Ebers's voice was full of confidence, interrupting everyone's doubts.

"Wall Street!" a quick-thinking executive blurted out, pinpointing the crux of the matter.

"That's right, it's Wall Street." Ebers' smile faded, and his expression turned serious. "Compared to the threat to WorldCom and the entire telecommunications industry, the ones who are truly most wary of Continental Telecom are those guys on Wall Street."

"Even if Ernst really intends to cultivate the telecommunications industry long-term, it will require a long period of planning, and he is only a long-term threat to us."

"But Wall Street is different. This high-speed data line has an immediate effect on Wall Street; a knife is already at their throat."

"So the entire Wall Street will put pressure on Telephone & Telegraph Corporation to keep it in place and prevent it from helping Continental Telecom." "By then, even if all of Continental Telecom's lines have been laid, they will only become a pile of unusable junk." Ebers' tone was tinged with coldness.

Bernard's plan was clear: to block the mainland telecommunications license and prevent it from operating.

Their contract with Lehman Brothers was about to expire, and they faced compensation claims.

The mainland telecommunications company needs to repay various loans, cover various labor costs, equipment maintenance costs, and so on.

Every day Ernst delays, he loses a day's worth of money.

If this is delayed for a year, the value of this route will be lost.

Verizon is already working on a similar high-speed dedicated line project, and several other regional telecom companies are also eyeing this market.

As time goes on, the first-mover advantage of this dedicated line from mainland China Telecom will gradually be lost, and its commercial value will be greatly reduced.

Under these circumstances, Ernst's wisest choice would be to sell off Continental Telecom before the end of this year.

They didn't make big money or achieve their strategic goals, but at least they didn't lose money.

After all, there was also a telephone and telegraph group, and WorldCom couldn't possibly offer them a bargain price; that would only benefit the other party.