Here's post one of two that I posted on Yahoo:
SPRINT PCS - A SHADOW OF NEXTEL
gad123
Oct 5 1998 8:37PM EDT
As promised, I have reviewed Sprint Corp.'s S-3 and S-4 filed respectively on 9/25/98 and 10/1/98 and at long last we have an all digital wireless company to compare with NXTL. So how is NXTL doing? Outstanding, thank you very much. But don't let me tell you what has been obvious to NXTL bulls. I'll let Sprint speak for itself. The quotes are the Sprint Corp. S-3 & S-4, with occasional comments from yours truly. Check out the details (each is in excess of 400 pages) on
EDGAR. :-)
The sum and substance of what you're about to read? We have invested in one heck of a company and I'm darn proud of what McCaw, Akerson et al (including MOT) have accomplished. NEXTEL IS A WORLD CLASS COMPANY IN THE MAKING. MIGHTY (HA!) SPRINT IS BEHIND AND TRYING TO PLAY CATCHUP.
HERE WE GO. ENJOY.
1. Cap ex from 7/1/98 to 12/31/99 is expected to be $3.2-$4.0 billion. Cap ex for 1998 and 1999 calendar years "will total approximately $4.7 billion to $5.5 billion."
2. S-PCS has had SIGNIFICANT problems implementing their CDMA system,
as indicated by the S-3: "Vendors often have not had systems available to fully meet the PCS Group's requirements ....(I)t is a significant challenge to add systems capacity, make software enhancements, ensure uniformity of deployment of features and functions..." "Assuming that a fourth quarter 1998 software release, which is currently in testing, meets expectations, management estimates that the PCS Group's billing system will have sufficient capacity for anticipated customer growth
through mid-year 1999....Contingency plays exist in the event that" (additional software releases) "are late, do not perform as planned or are delayed due to other business priorities."
3. "(R)apid expansion...has placed increasing demands on the PCS Group's customer care systems and processes as well as management information and financial systems and controls."
4. "(A)ggregate indebtedness, as of June 30, 1998 on a proforma basis, would have totaled $6.9 billion." They "proposes to issue, subject to market conditions, up to $3.0 billion aggregate principal amount of debt securities...for working capital purposes and to refinance existing indebtedness...."
5. "PCS Group does not require its customers to enter into long term contracts...."
6. "(Q)uality of the service provided by a network provider during a roaming call may not approximate the quality of the service provided by the PCS Group and its affiliated companies ....(T)he PCS Group customer may not be able to use any of the advanced features (e.g., voicemail notification) the customer enjoys when making calls from within the PCS Group network.
7. "The PCS Group has experienced a higher rate of customer churn as compared to cellular industry averages." WHY IS CHURN HIGHER? GET THIS, NXTL BOO BIRDS: "network coverage and reliability issues (e.g. blocked calls, dropped calls, handset problems)"
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