Deutsche Banc Alex. Brown 4/4/2000
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BEL/GTE/VOD form Verizon Wireless
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HIGHLIGHTS:
-- INTRODUCING VERIZON WIRELESS: Bell Atlantic and Vodafone AirTouch formally announced (4-April) the formation of their U.S. wireless joint venture. Pro forma for the Bell Atlantic merger with GTE, the new venture, which will undergo a massive advertising campaign to rebrand the three networks "Verizon Wireless," will be the largest wireless company in the U.S. Verizon will be 55% owned by Bell Atlantic and 45% owned by Vodafone AirTouch (who will treat this as an associated company for those Vodafone followers).
-- JUST HOW BIG IS IT? Verizon Wireless will be the largest U.S. wireless operator with 24.5 million subscribers, roughly twice the size of the second largest wireless entity in the U.S.:
VERIZON WIRELESS STATS
POPS 232 MM
Subscribers 24.5 MM (forecasted to grow to 28 MM by YE2000)
Employees 30,000
Top markets 49 of the top 50 (missing = Oklahoma City)
Source: Company documents.
-- 2000 UPDATE: Most excitingly, Verizon plans to launch an Internet portal in June, a la Vodafone/Vivendi's plans for Europe. Verizon believes that there could be 25 million users of portal based services in the U.S. within the next five years. Verizon plans to launch in July a 2-way short messaging services on a national scale, and a national pre-paid service is set for an August launch.
VERIZON WIRELESS PLANS AN IPO OF SHARES TO THE PUBLIC AS SOON AS POSSIBLE. Finally, on a conference call with investors, Verizon gave some preliminary guidance to its goals for 2000 results:
METRIC 2000 GOAL
Subscribers 28 MM
Net Additions 3.5 MM
POPs 232 MM
Penetration 12.1%
Penetration gain 1.5%
Revenue $14.5-15.0 Billion
EBITDA $5.5 - 6.0 Billion
EBITDA margin 37-41%
CapEx $3 Billion
Source: Company documents. |
