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WILLIAMS Communications tumbles after analyst's prediction

TULSA, Okla. (AP) _ Williams Communications officials are dismissing a suggestion that the company could fold or declare bankruptcy within a few years.

The Tulsa-based telecommunications company's shares fell 10.7 percent, or 46 cents a share, to an all-time low of $3.85 a share Monday, improving to $4.02 by midday Tuesday.

Williams Communications operates a nationwide fiber-optic network providing data, Internet, video, and voice transmission services to telecommunications carriers, utilities, and other service providers.

Analyst Robert Gensler said in this week's Barron's that their is an abundance of the service Williams Communications provides and intense competition in this market.

``I'm very bearish on the new broadband players, especially Level 3 and Williams Communications,'' said Gensler, manager of the year's top-performing telecommunications fund.

``There is a tremendous amount of capacity, and until the new broadband players _ the Level 3s and Williams Communications of the world _ go bankrupt or go out of business, there is too much competition in that space,'' he said.

Williams Communications officials dismissed the comment Tuesday as one analyst's opinion and said the company's business plan will pay off.

Scott Schubert, the company's chief financial officer, said Williams is generating liquidity with the closing of the sale of its Canadian unit to Telus and an announced agreement to sell its investment in Brazilian wireless provider Algar Telecome Leste.

``This successful execution of our financing plan pre-funds the company into 2003 when we continue to project achieving free cash flow,'' he said.

Company officials also said Williams Communications is different in that it has a stable customer base with long-term contracts, such as SBC Communications, parent of Southwestern Bell Telephone. Other telecommunications companies are embedded in the flagging dot-com sector.

Some analysts that follow the company note distinct differences between Williams Communications and Level 3.

``Both of their stock prices have done terribly,'' said Jake Dollarhide, an analyst for Frederic E. Russell Investment Management in Tulsa. ``And there's no way to sugarcoat it; Williams Communications does have a lot of debt. ... But one thing Williams Communications has done is complete its 33,000-mile network. It's done, whereas Level 3 is still in the middle of constructing its 16,000-mile network.''

Rod Woodward, a telecommunications analyst for Frost & Sullivan in San Antonio, emphasized the Tulsa company's relationship with SBC.

``SBC may have been given long-distance (privileges) in some states, but they're not going to build their own fiber network,'' he said. ``They're going to partner with someone and they've already made the strategic announcement that their preferred provider is Williams Communications.''

But Michael Hodel, an analyst with Morningstar, described Williams Communications as ``one of the more heavily leveraged telecom companies out there'' in a difficult sector.

``There are a lot of players right now,'' he said. ``And there are probably not enough customers.''

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