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LONG DISTANCE CREDIT QUALITY SOLID ACCORDING TO FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, May 7 /PRNewswire/ -- First-quarter 1993 results indicate long distance carriers sustained solid credit quality measures by boosting revenues, curtailing expenses, and holding capital budgets steady, Fitch says.
 AT&T Co., MCI Communications Corp., and Sprint Corp. each announced strong long distance traffic volume, revenue, and earnings improvement in first-quarter 1993. The three major carriers sustained 1992's momentum despite the lackluster economy. Although economic uncertainties persist, long distance traffic volume gained 7 percent in 1993's first- quarter over first-quarter 1992. For the three companies, revenues grew about 4 percent to $14.3 billion, driven by strong international demand, continued need for "outsourcing", or third-party management of corporate telecom networks, and the success of slight discounts on residential usage. The gap between volume and revenue narrowed, indicating price stabilization.
 AT&T, senior debt rated 'AA-' by Fitch, lost some market share, posting a 1 percent revenue gain for the quarter compared with the previous year, although revenues improved from the sequential quarter. Expense management, notably in access charges, coupled with cost structure improvements propelled operating margins to 13.3 percent compared with 11.9 percent in first-quarter 1992. "THE i PLAN," a consumer retention program, helped deflect some of MCI's success with big-spending consumers. AT&T is on FitchAlert with negative implications following its proposed purchase of a stake in McCaw Cellular Communications, Inc.
 MCI, 'A-' senior debt with an improving credit trend, continued to grow at more than twice industry rate. Its first-quarter 14 percent traffic gain generated 12 percent more revenue for first-quarter 1993 than the year-earlier quarter. Operating margins were up to 12.1 percent, rivaling AT&T and substantially above Sprint. MCI took advantage of low interest rates to refinance debt. Cash flow is strong and steady.
 Sprint's senior debt is rated 'BBB' with a stable credit trend. The company's revenues rose 10 percent to $1.5 billion compared with first- quarter 1992. Operating income increased almost 80 percent, lifting operating margins to 8 percent compared with 5 percent for the first quarter a year ago. Fitch expects the company's performance to continue to improve as restructuring to integrate Centel Corp. progresses.
 -0- 5/7/93
 /CONTACT: Susan Kalla, 212-908-0555, for Fitch/
 (T MCIC FON)


CO: AT&T Co.; MCI Communications Corp.; Sprint Corp. ST: New York, District of Columbia, Missouri IN: TLS SU: ECO

LR -- NY059 -- 6045 05/07/93 14:56 EDT
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Date:May 7, 1993
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