IPCS and UbiquiTel, Sprint PCS Affiliates, File to Go Public
Washington, March 13 (Bloomberg) -- IPCS Inc. and UbiquiTel Inc., wireless phone companies that both are Sprint PCS affiliates, filed for initial public offerings with the Securities and Exchange Commission.
Sprint PCS is the wireless-telephone business of No. 3 U.S. long-distance company Sprint Corp., which has agreed to be acquired by MCI World Com. Inc., the No. 2 U.S. long-distance company.
IPCS, which filed to raise $143.75 million, has an agreement with Sprint PCS to provide service in parts of Illinois, Michigan, Iowa and Nebraska. UbiquiTel, which filed to raise as much as $150 million, has rights to provide the service in parts of California, Nevada, Washington, Idaho, Montana, Utah, Indiana and Kentucky.
IPO plans by the two companies follow last month's offering by Sprint PCS affiliate Alamosa PCS Holdings Inc., which has seen its stock rise 79 percent from an IPO price of $17 per share. Shares in AirGate PCS, another affiliate, have more than quintupled from their $17 IPO price last September. Alamosa shares fell 1 7/8 today to 30 3/8. AirGate shares fell 3 5/8 to 92.
Investors in these affiliates are betting on the prospect Sprint PCS will grow faster than rivals such as AT&T Corp.'s wireless unit. Sprint PCS in the fourth quarter became the first U.S. wireless company to add more than 1 million customers.
IPCS, based in Geneseo, Illinois, is one of the largest of the 18 Sprint PCS affiliates, with the exclusive right to provide service and products to markets with a total population of more than 7 million people, its filing said. The company launched service in its first two markets last December and has since started offering service in two more.
IPCS' territory includes Peoria, Springfield, Bloomington, Rock Island, Moline and Champaign-Urbana, Illinois; Davenport and Dubuque, Iowa; Saginaw, Traverse City, and Grand Rapids, Michigan and eastern Nebraska. The company hopes to make money not only from its own Sprint PCS subscribers but also from outside subscribers who use the network as they travel through the territory on ``more than 1,700 miles of heavily traveled interstates.'
``Our territory is adjacent to several important operational Sprint PCS markets, including Chicago, Detroit, Des Moines, Indianapolis, Omaha and St. Louis,' the filing said. ``Also, more than 40 colleges and universities are located in the territory, with a total enrollment of more than 200,000 students.'
IPCS warned that it has not yet started construction of some parts of its network and that it is still working on design, site acquisition and engineering of other parts. The company had about $27.6 million long-term debt as of December 31 and said it will need to spend more money to develop, build, test and run its network, the filing said. The company reported a net loss of almost $4.4 million on revenue of $215,000.
UbiquiTel's territory includes Yellowstone National Park, Glacier National Park, Lake Tahoe and Sun Valley.
``We anticipate these destinations will generate significant Spring PCS travel and other roaming revenue from tourists,' said UbiquiTel, which is based in the Philadelphia suburb of Bala Cynwyd, Pennsylvania,
UbiquiTel, like ICPS, also expects to make money from traveling subscribers passing through its territory from the larger, adjacent Sprint PCS markets such as San Francisco, Seattle, Salt Lake City, Las Vegas, and Portland, Oregon.
UbiquiTel said its markets have an overall average population growth rate more than 60 percent higher than the national average; 120,000 college students; and lower penetration rates.
The company has started limited operations in one of its markets, and expects to cover slightly more than half of the resident population of its territory by the end of next year.
UbiquiTel's filing warned that the company expects to have ``substantial debt' -- perhaps $200 million worth -- once it completes some financing arrangements.
``We may be more highly leveraged than some of our competitors, which may put us at a competitive disadvantage,' the filing said.
Both companies filed to sell common shares. The number of shares to be sold and their prices will be disclosed in later filings.
Donaldson Lufkin & Jenrette heads underwriting groups for both offerings. Both companies want to trade on the Nasdaq Stock Market. ICPS wants to use the symbol ``IPCS.' UbiquiTel want to use the symbol ``UPCS.'
Mar/13/2000 19:37 |
