Telecom on alert for fallout

Telecom is watching WorldCom's unfolding accounting scandal with particular interest as they do business on a regular basis.

Spokesman Martin Freeth said Telecom and WorldCom exchanged call time on their networks around the world.

"They can be both a significant customer and supplier, and we'd be sorry to see them drop out of that business."

Freeth added that a change in the trading relationship with WorldCom would not affect Telecom customers.

WorldCom has a 10 per cent stake in the Southern Cross fibre-optic cable, which is 50 per cent owned by Telecom New Zealand and 40 per cent by Optus Singtel.

Southern Cross cable marketing director Ross Pfeffer said the announcement would have no effect on the operation of the cable.

"Southern Cross will ensure in any and every event that the cable stations will be manned."

WorldCom bought Auckland internet provider Voyager 1999 and shut down its residential business last December.

Business customers, which include MetService, are largely supported by WorldCom's Australian subsidiary Ozemail, the country's second-largest internet provider.