8/8...VSTR..VoiceStream's Loss Widens , subscriber growth/sales soar
By Jessica Hall
NEW YORK (Reuters) - VoiceStream Wireless Corp. (NasdaqNM:VSTR - news), the wireless telephone company being acquired by Germany's Deutsche Telekom AG (DTEGn.DE), said on Tuesday its second-quarter loss widened as subscriber growth soared 365 percent.
Bellevue, Wash.-based VoiceStream had a net loss attributable to common shareholders of $419.7 million, or $2.16 a share, compared with a loss of $132.8 million, or $1.39 a share, a year ago.
Analysts expected VoiceStream to post a loss of $1.62 a share, according to research firm First Call/Thomson Financial. The results were released after the stock market closed. Shares of VoiceStream closed at 122-1/4, down 1-15/16, on Nasdaq.
Total revenues rose to $453.6 million, from $109.1 million a year ago. Total service revenues rose 331 percent to $369.3 million.
VoiceStream's subscriber base increased 365 percent to 2.6 million customers, including 1.9 million monthly subscribers and 690 thousand prepaid customers.
It said its second-quarter subscriber growth was ``slightly lower'' than it had expected partly because it introduced its new ``Get More'' marketing program on a slightly slower-than-expected schedule.
VoiceStream still expects to add 450,000 customers in the third quarter and between 700,000-800,000 customers in the fourth quarter.
The cost to build its wireless network and expand its customer base has weighed on VoiceStream's financial results. Total operating expenses more than tripled to $718 million, compared with $215 million a year ago.
VoiceStream expects capital spending to be about $1.25-$1.50 billion in 2000 and 2001. It aims to participate in the upcoming auction of wireless licenses once held by now-bankrupt NextWave Telecom Inc.
VoiceStream's operating loss before non-cash charges was $61.4 million. Excluding marketing expenses, the operating loss was $129.1 million, compared with a loss of $33.0 million a year ago.
VoiceStream agreed to be acquired by Deutsche Telekom last month. The deal, which provides the German company with a foothold in the United States, is expected to face intense scrutiny in Congress, where many legislators have expressed concern about the 58-percent stake the German government holds in Deutsche Telekom.
``We are sure the transaction will be protested...but we believe that the transaction will ultimately be approved,'' VoiceStream Chairman John Stanton said in a conference call with analysts and reporter.
VoiceStream said 10 companies had approached it about possible deals, ranging from investments to mergers. Several of those companies made proposal, but it decided Deutsche Telekom offered the best value for shareholders and the strategic fit.
VoiceStream declined to identify the other suitors or other bid prices.
When asked if the company believed other bidders were still interested, Stanton said: ``We would fully expect that the deal would be completed, so consideration of whether other bidders are coming or not is not something we spend time thinking about.''
VoiceStream said it could cancel the deal if Deutsche Telekom's stock falls below 33 Euros shortly before the deal closes. The companies would be required to pay each other a $1 billion fee to walk-away from the deal for other reasons. |
