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Despite £1.8bn loss, MCI says it is back on track

MCI has reported a $3.4bn (£1.8bn) third-quarter loss due mainly to a write-off of the value of its assets.

The company's efforts to recover from its bankruptcy are being hampered by stiff competition in the long-distance telephone service market, it said.

As the company had warned last month, it took a $3.5bn non-cash charge. The company emerged from bankruptcy in April and changed its legal company name to MCI from WorldCom.

The loss for the quarter compares to a loss of $55m in the third quarter 2003.

The telecommunications company reported revenue of $5.1bn, a decline of 15% from the same period last year when it reported revenue of $6bn.

Nevertheless, MCI said its cost reduction initiatives are working and that revenues are stabilising in key business segments. An emphasis on operational execution had produced solid improvements in the third quarter, it said.

The company said its future focus would be on delivering new products and services that use IP technology and continuing its cost-cutting programme.

MCI will concentrate on selling internet, phone and network security services to large corporate customers, while stepping back from residential phone services as prices drop.

Sales in the division that serves global corporate customers fell 8% to $1.2bn in the third quarter, while revenue in the division that sells services for homes and US small businesses fell 17% to $2.2bn .

Laura Rohde writes for IDG News Service

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