WorldCom issues complaint to EC over Deutsche Telekom

14 Mar 2003

The latest step in the long-running battle between US-based bankrupt telecoms carrier WorldCom and German incumbent Deutsche Telekom (DT) [NYSE:DT] came yesterday when the former issued a formal complaint with the European Commission. WorldCom claims that the German telco broke the competition law in the wireline and internet markets by delaying giving competitors access to its leased lines, prompting business customers to choose the German telco’s own service instead of a rival. The troubled US operator argues that it is virtually impossible for it to compete in the German market for business internet services if the incumbent does not start releasing its leased lines at a quicker rate. The EU’s competition commissioner, Mario Monti, said that if DT was found to have breached European law, it will be forced to change its practices. DT claims there are no grounds for complaint, maintaining that it has already reduced the time span for the delivery of leased lines.

Meanwhile, WorldCom announced yesterday that it would take a USD80 billion write-down, taking its loss to one of the largest in corporate history. The company said it would cut the value of its property, plant and equipment and other intangible assets from USD44.8 billion to USD10 billion, and write off its USD45 billion of goodwill completely.