I typed this out fast while listening to interview but I think it hits the high points more or less:
Company did confirm plans to exit wireless
not really news
will stop adding new subscribers right away
will stop burn of $200 mil EBITA
WCOM will lose ~ $1bil revenue
should generate a small cash proceeds
Net - net will be positive for WCOM (get rid of money loser / add to EBITA generate some cash)
WCOM has gotten a few more banks on line re: $5 bil
Lead Underwriters of 5 billion backstop: JPM - Chase, C, Bank of America
Newly added banks: Amb Amro, Mitsubishi Bank, Westduche Bank, Duche Bank ,Bank of Tokyo
will mature 50% - 2005, 50% - 2006
Getting new backstop Key:
If you run numbers, Grover figures WCOM will generate free cash $1.5 - 2.bil (or more) annual which will allow company to meet debt maturities
will demonstrate time on its side
WCOM will be able to become more proactive rather than looking in rear view mirror
End of June is scheduled "done by date"
$5 billion back stop is key
Shareholder meeting will mostly address viability of WCOM going forward with visibility of $5 bil
UU NET is a "tremendous asset" no peer, WCOM should be able to leverage this fact
WCOM has the premier data network - likely to steer towards the high end of the market
"whittled down" core company will grow and throw off cash flow
If $5 billion backstop goes through risk of BK diminished to low level
whole Telecom sector now priced for disaster as compared to a couple of years ago when priced for perfection both views extreme and not viable
Who might buy WCOM?
answer: VZ
RBOC's going down hill - will have to acquire a long distance company "to be able" to exist (multitude of complex reasoning) will be a defensive move
Voice over IP will whittle them down - have structural risks - have to go "high tech"
MCI neighborhood et. al. will take away consumer margin and force them to acquire long distance to compete
Voice over IP will be big
Rule of three (long term evolution of any mature industry)
Verizon and WCOM combo? - makes perfect sense
Sprint and bell south
SBC and T
Quest left out in the cold
Industry can't trend to zero
Long distance companies are ideally positioned for the swing to digital /VOIP
No new company formation for three years
When things swing to positive it will happen fast - stocks will double and triple quick |
