Saturday April 10 12:59 AM ET
Sprint Bought Stake In Wireless Cable TV Company
NEW YORK (Reuters) - Sprint Corp. (NYSE:FON - news) has acquired a $15 million stake in People's Choice TV Corp. (OTC BB:PCTV - news), a wireless cable television company whose license may represent a way for the No. 3 U.S. long-distance company to reach customers without going through local phone networks.
Sprint's purchase, revealed in a recent regulatory filing, followed a similar move by its rival, MCI WorldCom Inc. (Nasdaq:WCOM - news), the No. 2 U.S. long-distance company. MCI WorldCom last month spent about $200 million to $300 million to buy the bonds of People's Choice and three other small wireless cable companies, sources familiar the situation said.
Sprint on April 5 acquired 497,405 shares of People's Choice preferred stock for $15 million, according to a U.S. Securities and Exchange Commission filing submitted Thursday by People's Choice.
Sprint also has options to purchase additional stakes in People's Choice in two installments valued at $4.5 million and $3.9 million, respectively, the filing said.
People's Choice was not immediately available to provide additional details. Sprint declined to comment.
Analysts said both Sprint and MCI WorldCom appear to be quietly seeking ways to gain access to the wireless licenses controlled by People's Choice. The long-distance companies want to bypass the Baby Bell's local phone networks and find their own direct connection to the homes and businesses of their customers.
The wireless licenses controlled by People's Choice and other wireless cable television companies would allow Sprint and MCI WorldCom to bridge the gap between their long-distance network and their customers, analysts said.
People's Choice and its peers control wireless spectrum called MMDS (multichannel multipoint distribution service), which uses microwave frequencies to provide television service.
Technological difficulties and production problems have hobbled the wireless cable industry's efforts to compete successfully against the traditional cable TV providers.
Many of the wireless cable companies filed for bankruptcy, but their licenses would be lucrative to the long-distance companies, analysts said.
Sprint stock finished Friday unchanged at $108.75 in composite trading on the New York Stock Exchange. People's Choice's stock ended up $1.84375 at $6.125 in over-the-counter trading. |
