Dave, many thanks for the link to that great TSC article. Sizing up wireless service providers, Vodafone still has a better balance sheet than most, although its current stock price reflects the addition of huge amounts of debt and earnings dilution from more shares. The fact that Vodafone is near its maximum limit as far as debt is concerned in the short run argues against an attempt by VOD to buy the remaining part of Verizon Wireless.
For an example of the other extreme--no debt whatsoever for a wired/wireless service provider, take a look at Montana Power (MTP), soon to be renamed TouchAmerica. The company started out as an electric utility company, headquartered in Butte, MT, with hydro, coal, oil and gas generation facilities. It sold off all its utility assets but kept the right of way under the electric lines and along the gas pipelines, using that land to lay fiber optic lines. It now has 26,000 miles of fiber optic lines, mostly in the western half of the country, plus some wireless facilities, all of which are now functioning without any long term debt whatosever. And unlike the high price earnings ratios commanded by debt laden companies (for what reason I don't know), MTP currently has a PE near 12. Go figure.
Art |
