(from the tape) <A> WinStar Chairman -2: Wireless Licenses Have Special Function
By Brian Steinberg
NEW YORK (Dow Jones)--The management of WinStar Communications Inc. (WCII) has no interest in selling the company, Chairman William Rouhana said.
Persistent market rumors have WinStar being scooped up by a larger telecommunications company, particularly AT&T Corp. (T).
Speaking at a New York forum sponsored by the Association For Local Telecommunications Services, Rouhana said WinStar executives are "absolutely not interested in selling our company. We do not think that is the way to maximize the company for shareholders."
He called the company's wireless licenses "a national treasure" and said they had to be developed carefully.
WinStar is an alternative phone service provider that transmits calls via microwave frequencies. Smaller phone providers have received much attention since WorldCom Inc. (WCOM) purchased Brooks Fiber Properties Inc. (BFPT), a smaller competitor.
Industry observers point to that deal as one sign that the telecommunications industry faces a wave of consolidation. As part of this dynamic, they say, larger phone companies - such as AT&T or the Baby Bells - will seek to scoop up smaller phone companies in an effort to provide integrated service. Shares of Teleport Communications Group Inc. (TCGI), for instance, rose Monday on speculation that some parties viewed the company as an acquisition target.
But Rouhana said WinStar was more interested in developing its wireless licenses in the 38 Ghz frequency than in being bought out. While he said the company has talked to almost every major long-distance company and Baby Bell, WinStar did not see selling itself as the best way to make use of its licenses.
Instead, Rouhana said the company sought a "forward, ongoing contract" with one of the full industry's larger entities.
While he did not rule out a potential sale in the future, Rouhana said the move would be considered only if it maximized shareholder value.
Still, consolidation will definitely take place in the industry, according to Daniel Reingold, a Merrill Lynch & Co. telecommunications analyst who also spoke at the forum. Eventually, Reingold said, the industry "will end up with a couple of players" - though "there will always be niche players percolating up." |
