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Wednesday November 18, 7:31 pm Eastern Time
Sprint sees strong growth in PCS business
NEW YORK, Nov 18 (Reuters) - Sprint Corp. (NYSE:FON - news) said it expects to see continued strong growth in its Sprint PCS wireless phone business and expects the operation to move toward EBITDA breakeven at the end of the year 2000 and be EBITDA breakeven for the full year 2001.
EBITDA is earnings before interest, taxes, depreciation and amoritization.
Speaking at the Warburg Dillon Read Telecom Conference in New York, Sprint Chairman William Esrey said he expects capital expenditures for the Sprint PCS business to be in the range of $3.0 billion to $3.5 billion a year through the end of 1999.
Capital expenditures beyond that time will depend on demand for services, he said.
Sprint shareholders recently approved a plan that allows the phone company to take full control of its Sprint PCS and buy out its cable TV partners in the venture.
Sprint's stock will begin trading later this month under two separate classes -- one reflecting the core local and long distance company and the other reflecting its wireless phone business.
Esrey said the two stocks will allow investors to better track the company's progress and value each part of the business more accurately.
Overall ''Sprint is very strongly positioned strategically. Perhaps the best in the industry,'' Esrey told analysts and investors at the conference.
Esrey reiterated Sprint's near-term expectation to grow core earnings in the high single-digit or low double-digit range as profits are dampened somewhat by investments in new services and its Global One venture with France Telecom and Deutsche Telekom.
Once the dilution from those ventures ends, Sprint's growth rates should double, Esrey said.
Esrey said Sprint has some of the strongest assets in the telecommunications industry, including its Sprint PCS business, its long distance and local telephone services as well as its new Integrated On-Demand Network (ION).
The ION network will allow customers to make phone calls, send and receive faxes and cruise the Internet over a single phone line.
Sprint the ION network will connect to homes and business through a variety of means, through ADSL (Asymmetric Digital Subscriber Line) technology from local telephone companies or through cable modems.
Sprint is currently testing the ION network with some beta customers and plans to begin rolling out the service in the first quarter of 1999, Esrey said.
Sprint previously said it had network access agreements with local phone companies. On Wednesday Esrey said Sprint had not yet secured deals with any cable companies but had been in talks for possible agreements.
Esrey also said Sprint has no plans to change its dividend policy in its core telephone business.
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