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Technology Stocks : Nuevo Grupo Iusacell (CEL)

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To: Rob Preuss who wrote ()	11/15/1999 2:47:00 PM
From: Rob Preuss	Read Replies (1) of 206

CEL is the 2nd largest PCS provider in Mexico. Otherwise known as Nuevo Grupo Iusacell, S.A. de C.V. (New Iusacell), CEL was organized as a limited liability stock company under the laws of Mexico on August 6, 1998. As a result of the exchange offer completed in August 1999, New Iusacell holds substantially all of the capital stock of Grupo Iusacell, S.A. de C.V. (Old Iusacell). As of Q3 1999, CEL + has more than 1.1 million subscribers. + has a market cap of only about $780 million. + is grossly undervalued at about $710/subscriber. + has Bell Atlantic ownership (42%) and management. + services 4 of Mexico's 9 regions (including Mexico City) + covers 67 million POPs (69% of Mexico's population). + recently upgraded entire system from analog to PCS/CDMA. + has record EBITDA margin of 36%. + has been EBITDA positive for the last 4 quarters. + 80% growth in subscriber base since Q3 1998. + has $472 million in U.S. dollar-denominated debt. + has a debt-to-capital ratio of 45.6% (vs 60.4% in Q3 1998). While Mexico is the 11th largest telecom market in the world, it has just 9.3% landline penetration and only 3.5% cellular penetration... so there's plenty of additional growth potential. (By way of comparison, the U.S. and Canadian markets have 20% cellular penetration while the European market has 30% cellular penetration.) CEL's main competition is Telemex (TMX) which has 4.2 million cellular subscribers; both CEL and TMX are expected to have double-digit annual growth over the next 5 years. Website... iusacell.com.mx

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