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AT&T threatens MCI with price war

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MCI, the company formerly-known as WorldCom, is about to emerge from Chapter 11 bankrupcy protection but faces a rocky start, according to new AT&T president William Hannigan.

He would rather cut prices than lose customers to MCI: "we are not going to lose our customers," he told the FT. If competitors try to take them we will punch them on the nose, and if that doesn't work, we will punch them on the nose again."

Conceding a price war could be damaging Hannigan said, but "driving down prices will hurt the business, but will be even more damaging to the business to lose market share".

He dismissed rumours that AT&T is considering buying a wireless operator, saying prices were too high. Instead AT&T will launch a virtual mobile service, leasing capacity from existing networks.
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