WorldCom may bid for AirTouch

The prospect of a three-way bidding war breaking out for AirTouch intensified yesterday as MCI WorldCom, the acquisitive US group, was reported to be showing an interest in the mobile phone operator, writes Peter Thal Larsen.

Reports from the US suggested that WorldCom had contacted AirTouch to express its interest, although it had not yet tabled a bid.

The speculation emerged as executives from Vodafone met AirTouch executives in New York to discuss the UK mobile phone giant's $55bn offer for the group. AirTouch is already in takeover talks with Bell Atlantic, the Baby Bell.

A bid for AirTouch would be a change of strategy for WorldCom, whose chief executive, Bernie Ebbers, has always expressed his belief that fixed wire telephony will be the main way for carrying data communications between businesses. Recently Bert Roberts, WorldCom's chairman, suggested that mobile phone operators were overvalued.

A spokesman for WorldCom refused to comment on the reports.

Analysts have suggested that a US bidder would be able to pay more for AirTouch because it could extract greater cost savings from the business than Vodafone.