WinStar surges after Williams deal Telecom providers ink million-dollar capacity swap By Jeffry Bartash, CBS MarketWatch Last Update: 3:53 PM ET Dec 17, 1998
NewsWatch
NEW YORK (CBS.MW) - Shares of WinStar Communications spiked 7 percent Thursday after it agreed to swap some of its wireless capacity for some capacity on Williams Communications' national fiber network.
Under the deal, announced at WinStar's investment conference in New York City, WinStar will allot 2 percent of its long-term wireless capacity to Williams for $400 million over four years.
In return, Williams will provide WinStar with a portion of the fibers in the 32,000-mile route national network that Williams expects to complete in 2000. WinStar will pay $640 million over seven years.
Shares of Winstar (WCII) jumped 2 7/16, or 7 percent, to 37 in late afternoon trading. Williams (WMB), parent of Williams Communications, rose 7/8, or 3 percent, to 29 13/16.
The deal essentially will allow WinStar to offer high-speed local, national and data services to its wireless customers by hooking them up to William's broadband network. Williams, which sells wholesale fiber-optic access, will be able to offer wireless services.
WinStar will build 270 hubs by 2001, 60 of which are already operational and will be immediately made available to Williams. Williams will provide 60,000 fiber miles and other network-related items, at a lower price than WinStar had previously been paying.
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