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Technology Stocks : WCOM -- Ignore unavailable to you. Want to Upgrade?

To: P.M.Freedman who wrote (4618)	6/9/1999 9:41:00 PM
From: pkwknk	Read Replies (1) \| Respond to of 11568

I thought wcom was mainly interested in commercial, not residential so why the wireless cable purchases?

To: P.M.Freedman who wrote (4618)	6/9/1999 10:29:00 PM
From: Anthony Wong	Respond to of 11568

Have They Gone Mad? SmartMoney, June 8, 1999 By Alec Appelbaum ORDINARILY, you'd compost a company if it started acquiring failing businesses instead of growing ones. But in the world of wireless communications, buying bankrupt wireless cable operators can make perfect sense. Why? These companies may be bust, but they own a valuable asset -- radio spectrum good for transmitting local broadband services. And that is especially attractive to long distance companies because it enables them to circumvent Baby Bells and other local operators when hooking up to the homes and offices of their customers. That's why Sprint (FON) purchased Shelton, Conn.-based People's Choice TV (PCTV) and Colorado Springs-based American Telecasting (ATEL) this spring, while MCI WorldCom (WCOM) grabbed CAI Wireless (CWSS) and a few smaller operators. And just last week, No. 4 long distance player Qwest Communications International (QWST) joined the carnival, paying $90 million for a 19% stake in Advanced Radio Telecom (ARTT). Bellevue, Wash.-based Advanced Radio had been on Standard & Poors' credit watch list, and its last Securities and Exchange Commission filing warned that it might not live to witness the new millennium. But now it plans to establish local service, connected to Qwest's Internet-friendly fiber network, in 40 of the nation's top 50 markets. Should you be concerned that these long distance superstars are keeping shady company? Au contraire, says Davenport & Co. analyst Drake Johnstone, who covers MCI WorldCom and Qwest. "Both have been very opportunistic," he explains. "They said, 'Holy Cow! Here are all these companies with all this spectrum we can use.'" Spectrum licenses are a precious commodity sold by the government. A license gives the holder the right to use a certain segment of the airwaves for communications traffic. The supply is limited. In fact in the regions where Sprint and MCI made their purchases, the full spectrum useful for long-range service has already been sold off, according to Elliott Hamilton, senior VP of telecom consulting at the Strategis Group. Broadband wireless service is not perfected yet. It remains sensitive to weather, and the programming that lets broadband wireless signals bend around objects such as trees still has some bugs in it. But at bargain-basement prices, big companies can afford to put their labs to work on the necessary upgrades. "I think WorldCom was paying approximately $24 per point of presence," says Johnstone. That's less than one-tenth of 1% of what AT&T (T) committed for each cable subscriber in its purchase of MediaOne (UMG). Of course these troubled firms are a fraction of the size of MediaOne and need a lot more help. So should speculative investors start buying distressed wireless companies in the hope of getting bought out at a premium? Only with the Maalox handy. That's because it's difficult for an ordinary investor to know which licenses are most valuable. And if the company isn't bought, you may be left with nothing. For the truly adventurous, we can offer two names: San Francisco-based World Wide Wireless Communications (WLGS), which trades on the bulletin board, and Jackson, Miss.-based Wireless One (WIRL), which recently got a vote of confidence in the form of a $36 million investment by daring hedge fund Cerberus Capital Management. Wireless One also has an 11.8% stake from the venture arm of Chase Manhattan Bank (CMB). smartmoney.com