Surpising that the MICTF stock went down on this news...
Seems like lots of telecom companies around the world would be interested in getting a "foot-in-the-door" with the only GSM player in Canada.
It does, however, bother me that Sirois is making comments about the cellular industry not being profitable after 10 years. Last I checked-companies like AirTouch, Do-Co-Mo, Orange, Vodafone, etc. were making plenty of money and have over 30% cash flow margins.
Friday May 7, 4:57 pm Eastern Time
Canada telecom Microcell says ready for alliances
By Robert Melnbardis
MONTREAL, May 7 (Reuters) - Armed with C$200 million of new bank financing, Canada's fast-growing Microcell Telecommunications Inc. (MICTF - news) said on Friday it was willing to change its ownership structure to expand further.
''Microcell will remain open to alliances, and even to adjustments to its ownership,'' Microcell Chairman Charles Sirois told the company's annual meeting.
''But I must emphasize that we will promote flexibility, adaptability and innovation more than size,'' he added.
Speaking to reporters later, Sirois said the company was not in discussions on changing its ownership or acquiring another telecommunications concern.
''We aren't excluding forming alliances as far as the ownership is concerned, but there are no discussions with anyone,'' he said.
Microcell, whose Fido brand of digital mobile phone services has about 344,000 customers in Canada, is owned 28 percent by Telesystem Ltd., a private holding company 66 percent held by Sirois.
Call-Net Enterprises Inc. (CN.TO - news), the parent company of Sprint Canada, owns 11 percent of Microcell and Montreal-based cable and broadcasting concern Groupe Videotron Ltee. (VDO.TO - news) holds 6 percent.
Sirois is a 44-year-old Quebec billionaire entrepreneur who is also chief executive of Teleglobe Inc. (TGO.TO - news), which merged with Dallas-based Excel Telecommunications Inc. in November to become the fourth-largest U.S. long-distance telephone phone company.
A C$200 million senior secured term loan Microcell obtained on Friday is denominated in U.S. dollars and comes from its existing lenders and new ones. The loan brings Microcell's total credit facilities to C$750 million.
The new funds will be used to finance the cost of adding new subscribers, and for capital expenditures and working capital, the company said.
Microcell has shown little difficulty in raising financing since acquiring its Canadian personal communications services license in 1995. The company has raised C$1.5 billion of capital, all without the prospect of net profits until 2003.
Microcell officials said they expect the company to show at least one month of positive cash flow next year and to be cash flow positive for 2001 overall.
''It's long, but that is part of the industry. The cellular industry has been around for almost 15 years, and has still not made a profit,'' Sirois said.
Sirois added that the group is building the ''telephone company of the future,'' because of the widening array of services being offered via its Fido phone handsets.
''The Fido telephone will become the access through which you will receive all of our local services,'' he said.
Another example of that was unveiled on Friday when Microcell and Royal Bank of Canada (RY.TO - news) announced a pilot project to develop wireless banking services in which Fido customers would be able to bank directly from their handsets.
The bank said more than 1.3 million of its 10 million customers already bank by phone and another 400,000 use Internet banking services.
Microcell shares slipped 35 Canadian cents at $11.10 on the Toronto Stock Exchange on Friday and were off 19 cents at $7.56 on Nasdaq.
($1=1.46 Canadian) |
