Now Comes The Hard Part: How will MCI and WorldCom make it all work?

For MCI Communications Corp., taking WorldCom's high bid was the easy part. Integrating the two carriers into MCI WorldCom will be much more difficult, industry analysts predicted last week.

"They have a humongous task ahead of them as far as network and systems integration goes," said Christine Heckart, vice president of TeleChoice. Others echoed the sentiment, as it became clear that both interexchange carriers have much to do before the $37 billion merger can be called a success.

Each carrier hopes to feed off the other's strengths. The merger would more than double WorldCom's long- distance footprint and speed its network expansion, according to a report from International Data Corp. MCI's local service fills in gaps for MFS. And WorldCom would benefit from MCI's international reach. The merger also would increase the two carriers' Internet clout (see story on page 9).

Many said WorldCom paid too much for MCI, however. The fourth-largest IXC agreed to pay MCI stockholders $51 of WorldCom common stock for each MCI share, up from its initial bid of $41.50 per share. As part of the contract, WorldCom agreed to pay BT $51 in cash per share for the 20% of MCI stock it owns, compensating BT for being dumped by MCI.

GTE Corp., which offered $40 in cash per MCI share in the bidding war for the second-largest IXC, said its offer stands.

The merger is subject to the approval of the stockholders of both companies, the Federal Communications Commission, the Department of Justice, various state government boards and the European Commission. Estimates are that the deal won't be completed for six to nine months. That leaves plenty of time for MCI to change its mind again, one analyst said.

"GTE has a tremendous local business and no redundancy or overlap with MCI," said Paul Wickre, president of Frame Relay Systems and Technology, a Washington-based consulting firm. A GTE/MCI deal "would have been more in keeping with the goals of the Telecommunications Act, and [GTE] has its operational stuff down, so there would have been no disruption to the MCI customers."

With MCI WorldCom, however, the potential for network and operational integration problems is tremendous, Wickre said.

Because MCI frame relay is routed through equipment from Bay Networks, and WorldCom uses Cisco StrataCom equipment from its WilTel acquisition, the new company will have to "eliminate dual trunking and backbones and somehow maintain the service levels," Wickre said. "They've also got billing consolidation to confront. This is going to take years."

Who will lead MCI WorldCom long-term is also a question. Bert C. Roberts Jr. will become chairman of MCI WorldCom and boss to Bernard J. Ebbers, who will become president and chief executive officer of the company when the merger is completed, the two men announced during a press conference.

"But Bernie will call the shots," said TeleChoice's Heckart. "I don't expect to see most of MCI's top management stick around past the end of next year because they are not used to taking a second seat."

Although MCI WorldCom is the merger's moniker for now, the brand name is still a variable, according to WorldCom and MCI.

"If you look at their other acquisitions, they have always kept the names intact," said Brett Azuma, director and principal analyst of Dataquest, San Jose. "MCI has done a good job at branding. I believe the MCI namewill remain and any changes will be transparent to the customer.

"WorldCom doesn't do a lot of branding," he added, "and generally people don't know who they are. How they can turn that around remains to be seen."