<A> Teligent Says Its Build-Out Progresses Ahead Of Schedule
By Brian Steinberg
NEW YORK (Dow Jones)--Teligent Inc. (TGNT), the closely watched, upstart phone-service provider, will enter more markets than it had expected in this year and the next, according to the company's top executive.
The company will be up and running in "somewhere between 10 and 20 markets" in 1998, said Chairman and Chief Executive Alex J. Mandl. Teligent had predicted it would operate in only 10 markets in 1998 and 20 in 1999. Telligent essentially plans to offer telecommunications services by linking users through its licenses in the microwave spectrum.
"We are clearly ahead of our deployment schedule for the rest of the year," Mandl told Dow Jones.
Mandl said such an acceleration would push the company's plans forward in 1999 as well.
In addition, the company said it hopes to begin a commercial launch in its operating markets by as early as the end of the third quarter. Teligent also has said it signed agreements with long-distance provider Frontier Corp. (FRO) and Concentric Network Corp. (CNCX) that will let it offer customers a full bundle of services when operations begin.
Investors watched Teligent closely before it was spun off last November from The Associated Group (AGRPA), a holding company with a knack for coming up with novel - and profitable - telecommunications concepts. Mandl, the former president of AT&T Corp. (T), also has brought the firm considerable attention.
But investors have been waiting for a clear sign that the newly born corporation has what it takes to survive. Clearly, the idea of broadcasting phone calls via the microwave spectrum is novel. WinStar Communications Inc. (WCII), Advanced Radio Telecom Corp. (ARTT) and the BizTel unit of Teleport Communications Group Inc. (TCGI) all have set out to make a business of the burgeoning technology.
Teligent has yet to report a significant customer base or significant revenue. Still, analysts view the news as important for the company.
"You're talking about a company that's in an early stage," said Ken Hoexter, who follows Teligent for Goldman, Sachs & Co. "This shows the experience of management, which has been able to pull of its parts together."
"It's a confidence booster," he added.
W. Jack Reagan, an analyst with Legg Mason Wood Walker, said investors still may wait until hard revenue figures are available. "It's hard to get people excited about these operational things, but they are critical," he explained. "People don't recognize the value of having the switches in place, having the sales force in place, having the technology ready."
Reagan said the company probably will have to wait for "a couple of quarters from now" before it can give the market the financial evidence it craves.
Mandl said he was comfortable with Wall Street earnings estimates for the next couple of quarters.
In a first-quarter earnings report released Tuesday, Teligent posted a net loss of $38.6 million, or a loss of 73 cents a share against pro forma losses of 15 cents a share in the year-ago period. Teligent said it had $98,000 in revenue in the first quarter.
A First Call survey of five analysts expects the Vienna, Va., company to post a loss of 75 cents a share next quarter and a loss of $3.55 a share for the year.
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