Anyone else around here more a little interested in the possibility of a seperately trading Sprint PCS wireless stock? From today's NY Times:
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Sprint Wireless Spin-Off Called Near
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Sprint's Stability Sees Stock Outshine Its Competitors (Oct. 24, 1997)
By SETH SCHIESEL
he Sprint Corp. is close to an agreement to spin off its wireless
telephone business as a publicly traded company, allowing its cable
television partners to escape a venture that never reached its lofty
goals, executives close to the negotiations said on Monday.
The new company could have a market value of as high as $9 billion, the
executives said, which would make it the nation's second-largest wireless
company after Airtouch Communications Inc.
Sprint, the No. 3 long-distance carrier, now owns 40 percent of a venture
called Sprint PCS, which stands for personal communications services, a
new generation of digital wireless technology.
Tele-Communications Inc., the nation's largest cable television company,
owns 30 percent of the venture, while the Comcast Corp. and Cox
Communications Inc, two other large cable operators, each own 15 percent.
The four companies founded the partnership, formally known as Sprint
Spectrum LP, in 1994, when it seemed to many people in media and in
telecommunications that their industries were destined to converge. The
Sprint Spectrum partners envisioned a powerhouse that could offer not only
mobile wireless service but also perhaps advanced data services to homes.
But that convergence has not happened, at least not the way the Sprint
PCS partners envisioned it. For at least a year it has appeared clear to many
cable television executives that wireless telephone service is not central to
the success of their business. Instead, cable television companies across the
nation have been trying to offer high-speed Internet access using their
existing networks.
Having invested about $2.5 billion in the Sprint Spectrum venture, which has
yet to turn a profit, the cable partners have been seeking a way out.
Their preferred method would have been for Sprint simply to buy out the 60
percent of the venture that it did not already own. But Sprint was not willing
to sacrifice its earnings to do that, according to people close to the
negotiations.
Sprint Spectrum spent $2.1 billion in auctions held by the Federal
Communications Commission for big wireless licenses that allow the venture
to potentially offer coast-to-coast service. By ceding to the venture
$545-million worth of smaller licenses that it bought on its own, Sprint will
assume sole control over the wireless company, people close to the
negotiations said.
Sprint will then reissue its stock in two publicly traded classes, the people
said, one to represent the company's core telephone operation and one to
represent its interest in the wireless carrier.
The cable companies would be free to convert their stakes into cash by
selling parts or all of their shares on the open market.
A Sprint Spectrum spokesman declined to comment.
People involved in the negotiations said a deal could be announced within a
week. They said the final outstanding questions were coming from France
Telecom and Deutsche Telekom, which each own 10 percent of Sprint.
It was unclear Monday just how Sprint intended to handle the distribution of
the new class of shares to its existing stockowners. But one person close to
the negotiations expected existing shareholders to get a choice of whether to
receive both types of stock or to retain only shares of the standard
telephone business.
With 1.1 million subscribers in 157 markets, Sprint PCS is one of the
country's larger wireless carriers. The venture owns licenses for the entire
nation, but offers service in areas covering just under half of the United
States population. The venture added 227,000 subscribers in the first
quarter of this year, more than the 195,000 added by the AT&T Corporation
but almost 40 percent fewer than the 371,000 new customers added by
Nextel Communications Inc.
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Once the buildout has prgressed another year or two this could be awesome. No? The only really national cell service, and the best flavor of digital (CDMA) to boot.
Doug |
