Peter Kiewit Sons Inc, the privately held mining, utility and telecommunications group which started up MFS Communications Inc and floated it in 1993, has decided to re-enter telecommunications, this time with a $3bn venture to build a 20,000 mile high speed data network throughout the US. The venture is through a subsidiary of Peter Kiewit, Kiewit Diversified Group which recently sold off its interest in CalEnergy for $1.2bn, and now has been renamed Level 3 Communications Inc. It has $3bn in the bank, to invest in the network, which is due to be built by the end of 1999. Omaha, Nebraska-based Kiewit that turned over $2.9bn in 1996, could be mistaken for a rich amateur in the telecoms industry, but in fact it has already masterminded one of the great telecoms success stories, in the shape of. MFS, in which its initial $500m investment would be worth $5bn today, and forms the core of the current WorldCom. Kiewit Diversified was the majority shareholder of MFS until the $14bn acquisition by Worldcom Inc in 1996. Now Level 3, it is going into direct competition with Worldcom and three other high speed data network builders, IXC Communications Inc, Qwest Communications Inc and Williams Communications, who have all pledged to have thousands of miles of high speed networks up and running before the year 2000. Level 3 chief executive officer James Crowe, who defected as chairman of Worldcom to Kiewit in July, (CI No 3,196) is adamant that the market is going to be big enough for all the companies to prosper, claiming that Moore’s law that semiconductor chip price/performance will double every eighteen months, will now apply to telecoms capacity. The new money in telcoms is apparently to be made through owning cheap high speed data networks, rather than expensive to build and maintain voice networks. The company will be based in Denver, Colorado, in the same city as its competitor Qwest.
