CORRECTED - DEALTALK-Corporate telecom service providers eye M&A deals

(Corrects bankruptcy exit date to December 2003 from 2004, para 13)

(For more Reuters DEALTALKS, click [DEALTALK/]

*Global Crossing looking for deals

*Telcoms deals may involve Sprint, Savvis, Level 3

By Sinead Carew

NEW YORK, June 10 (Reuters) - Despite the failure of Qwest Communications International (Q.N) to sell its long-distance network, merger talks between U.S. corporate telecom service providers are expected to heat up as they look for savings.

Global Crossing (GLBC.O) Chief Executive John Legere said companies like his are looking at deals to help them compete more effectively against market leaders Verizon Communications Inc (VZ.N) and AT&T Inc (T.N).

"There are huge synergies available in the industry as it consolidates. I believe investors will get those synergies somehow," Legere told Reuters on Wednesday.

"Especially in North America...the synergies between any two players in the industry are somewhere between $200 million and $500 million a year, and that's just for the tier two players," he said in an interview.

Legere conceded it could take time for deals to materialize given limited financing opportunities, but he named a pair of companies that could take part in such consolidations: Level 3 Communications (LVLT.O) and Savvis Inc (SVVS.O), a provider of outsourced computing and network infrastructure.

"Savvis plays in certain spaces we'd like to play in and we play in some places they don't play in very efficiently," Legere said. He added Global Crossing was not in a position to immediately make an acquisition.

He also predicted possible deals involving Sprint Nextel Corp (S.N), which runs a long-distance network in addition to its cellphone business, as well as smaller companies such as Carl Icahn-controlled XO Communications, AboveNet Inc (ABVT.N) and Paetec, which was formerly known as McLeodUSA.

Sprint and Level 3 had looked into bidding for the Qwest assets, but were unwilling to pay the $2 billion-plus that Qwest wanted.

Now, Level 3 is in early-stage talks about a joint venture involving Sprint's wired network, according to a Wednesday report on the Wall Street Journal website. The companies declined comment. [ID:nN10265238]

NOT A LOT OF MONEY

D.A. Davidson analyst Donna Jaegers said such a deal would help Level 3 grow and would save money for Sprint, which is focused on stemming customer losses at its mobile service.