Williams Returns to the Telephone Business

From Bloomberg News

Williams Cos. said it’s back in the long-distance telephone business, three years after it sold its nationwide fiber-optic network to WorldCom Inc. for $2.5 billion.

The natural-gas pipeline company said it plans to quickly rebuild the telephone side of its business by serving as a “carrier’s carrier,” providing wholesale long-distance service to companies that then resell it to individual customers.

While Williams stayed out of the phone business for three years under an agreement with WorldCom that expired Monday, it rebuilt its fiber-optic network and provided non-telephone services such as transmitting video and data. Now lower costs of laying fiber-optic cable combined with increased demand for phone and Internet service make the market more attractive, the company said.


“We are back. Big time,” Howard Janzen, president and chief executive officer of Williams’ communications group, said in a statement.

Telecommunications now accounts for about 30% of Williams’ revenue and is expected to increase even as the company adds to its energy businesses. In November, Williams agreed to buy Mapco Inc., giving it pipelines that move propane and butane, for $3.3 billion in stock and assumed debt.

Williams shares rose 50 cents to close at $29.19 on the New York Stock Exchange; WorldCom shares rose $1.19 to close at $31.13 on Nasdaq.