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MCI, NEWS CORP. WIN BID FOR SATELLITE TV LICENSE
Published January 26, 1996
MCI and News Corp. will pay $682.5M for the last remaining license for direct broadcast satellite television. They hope to begin offering their pay service in two years, according to Mike Mills of the WASHINGTON POST. MCI and News Corp. "still face considerable challenges," as they must spend around $1B to start the business. They also face established competition, including DirecTV, USSB and Primestar. The deal seeks to combine News Corp.'s expertise in TV with MCI's marketing skills and base of 20 million customers (WASHINGTON POST, 1/26). Some "analysts are "skeptical," citing the high cost of the system and the competition (Edmund Andrews, N.Y. TIMES, 1/26). Daniel Reingold, telecom analyst at Merrill Lynch, said News Corp. could give the service some content, "but they won't have the full panoply of offerings customers will want." Execs at both companies say the deal won't focus only on the "consumer market. The venture will also seek to delver a broad array of business oriented offerings to companies" (Mark Robichaux, WALL STREET JOURNAL, 1/26).