Fez, i don't follow Sprint too closely, but I did a little math and the idea of a three-way deal in which MCI WorldCom bought the Sprint PCS wireless business and another company took the long-distance network... Interested buyers might include Qwest Communications (QWST: news, msgs), Global Crossing (GBLX: news, msgs) or Level 3 Communications (LVLT: news, msgs) seems pretty unlikely to me.
I looked a some of Sprint's filing and they break out results into PCS Group (the wireless stuff) and FON Group (everything else).
Results for the six months June 30, 1999 (in thousands):
Revenue
FON $8,416
PCS $1.340
Income
FON $792
PCS ($1,160)
Now, if we double those FON Group numbers to get a full year's results
(I know this is not a very acurate way to do it, but it is close enough to make my point without spending too much time) we get:
Revenue
$16,836
Income
$1,584
Now, what multiple do we need to apply to those numbers to see what it might cost to buy just the FON Group?
I think 2 times Revenue or 20 times Income would be too low, but using either of those methods puts the price well north of $30 Billion.
That's 50% above LVLT's market cap.
QWST should have enough headaches trying to get regulatory approval for the US Worst merger.
GBLX just got some really nice US assets from Frontier. From what i've been reading, it seems like they now looking to build out, partner or buy the "last mile" in US and other countries.
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