All... Forwarded by LU investor relations in response to an inquiry about the SPC contract... interesting cdma spin and aggressive vendor financing by LU. Looks like 3 nationwide cdma systems for Mexico (Qualcomm, SPC, Iusacell).
Thank you for your inquiry.
Attached please find the SPC Mexican contract information:
Mexico SPC Taps Lucent For $700M Network, Cites Financing
MEXICO CITY (Dow Jones)--Sistemas Profesionales de Comunicacion SA, the
ambitious start-up that aims to bring phones to Mexico's masses, said Monday
it tapped Lucent Technologies Inc. (LU) to build a $700 million wireless
network.
Lucent edged out Canada's Northern Telecom Ltd. (NT) because it offered better
financing, said Jose Luis Riera, SPC finance director.
"At the end of the day, it was a financing issue," Riera said in an interview.
"In terms of financing, Lucent had a more competitive proposal."
Lucent agreed to finance 100% of network costs over eight years, with no
payments due the first three years, Riera said. He wouldn't discuss interest
rates but said they would decline as principal payments grow.
Lucent, the U.S. telecommunications provider spun off from AT&T Corp (T) in
1996, declined comment. "We definitely are talking, but that's all I can say,"
said spokeswoman Barbara Burgess.
SPC plans to deliver digital wireless service to 1.5 million Mexicans in two
years, mostly middle- and lower-income residential users who don't have
phones.
The main shareholder is Ricardo Salinas Pliego, who also controls Mexico's No.
2 television broadcaster TV Azteca SA (TZA) and Grupo Elektra SA (EKT), a
retail chain whose 640 stores sell electrical appliances on credit to 1
million customers and handle money transfers from the U.S. through Western
Union.
SPC said it signed a letter of intent with Lucent on Thursday, marking the
final piece of the financing puzzle in plans to invest more than $1 billion
during five years. SPC said last week it planned to issue $225 million to $275
million in high-yield bonds and raise $160 million in private equity
offerings.
"It looks to me like they're planning a very aggressive market entry
throughout Mexico," said Ed Czarnecki, a consultant for Latin America at BIA
International Inc. "This is a tremendous investment and a tremendous vendor
opportunity."
SPC plans to begin service later this year in three medium-size cities,
tentatively Cuernavaca, Toluca and Acapulco, Riera said. It expects to have
nationwide service by June 1999, with 800 transmission sites in five years.
SPC said it also considered Finland's Nokia Oy (Y.NOK) and Sweden's Telefon AB
LM Ericsson (ERICY).
It narrowed the field to Lucent and Nortel because they offered Code Division
Multiple Access, or CDMA, technology, which increases capacity by tagging
calls on the same frequency with individual codes, Riera said. Other proposals
relied on Global System for Mobile Communication, or GSM, technology,
generally considered less expensive but unable to handle as many calls. |
