Some details and opinions on OMPT and ERICY and Siemens....
Actually, OMPT's financing deals with ERICY and Siemens is only for their equipment (base stations, switches, handsets, etc.). The only way a manufacturer would loan $$ to an operator would be for purchasing it's own equipment. ERICY would not loan OMPT $$ so OMPT could turn around and purchase Nokia handsets. Financing for on-going operations, incentives, FCC license repayments, etc. is not part of the financing arrangement. This must be done with additional debt (OMPT has alot of high-yield junk debt) or additional equity.
ERICY and Siemens (and other infrastructure makers) have pretty much all publicly said they are not interested in being operators. They get all of their $$ from operators who they do not want to start competing against. If ERICY bought OMPT, don't you think AT&T and other operators would be rethinking their relationship with ERICY? I would expect an ERICY buy-out of OMPT about the same probability of BEL buying out OMPT (i.e., nil)
Obviously, ERICY has a significant interest in seeing OMPT succeed and could actually be helping to facilitate and consult on a deal. ERICY understands the economics of the wireless business and knows that you must have huge up-front $$ to finance build-outs in hope for large returns in the future. Successful wireless operators (ATI, VOD, etc.) have shown how the wireless operator business model can go from huge losses to huge profits (>40% Cash Flow margins) in only a few years. So for ERICY-they not only get to sell their equipment (and gain share) to OMPT-but also make a little interest in the process. But they (like Nokia, Motorola, Siemens, etc) are not an operator because they would not want to compete against their customers (AT&T, BEL, etc.) Doing so creates alot of risk as well as getting into the service business that they (ERICY) really don't understand as well as manufacturing.
OMPT will definitely get bought-out or announce "strategic" investor soon-I just think ERICY is not a possibility. SBC, Bell South, MCI/WorldCom, Mannesmann, BT (if can get out of non-compete with AT&T), Western Wireless, or other European telco (Telefonica, Telecom Italia, etc.) are the only real operators I could see OMPT with. Thoughts?? |
