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Technology Stocks : Microcell ( mictf mtib.m mtib.to ) -- Ignore unavailable to you. Want to Upgrade?

To: kumqwatt who wrote (24)	11/12/1999 11:13:00 AM
From: Don England	Respond to of 29

fly in the ointment from sell-off discovered - its the feds - or whatever the canadian equiv. is - don Related Quotes AERL MICTF MTIb.TO OMPT RCMb.TO VSTR 41 1/2 24 5/16 36.25 81 5/8 44.10 94 11/16 -3/4 -1/16 +0.65 -2 1/8 +0.50 -2 1/4 delayed 20 mins - disclaimer Thursday November 11, 4:39 pm Eastern Time Canada Microcell's stock rises after broker upgrade By Charles Grandmont MONTREAL, Nov 11 (Reuters) - Shares in Microcell Telecommunications Inc. (Toronto:MTIb.TO - news)(NasdaqNM:MICTF - news) surged on Thursday after a U.S. broker boosted his target price for the stock on rosy prospects for the company's popular Fido cellphone in Canada's booming wireless market. Shares of Montreal-based Microcell, which markets digital cellular phones under the Fido label, rose 2-11/64 to 24-1/4 on Nasdaq midafternoon, and C$3.55, or 11.3 percent, to C$36.40 on the Toronto Stock Exchange. Deutsche Banc Alex, Brown analyst Bo Fifer said he raised his target price on the stock to $34 from $22. ``The bulk of the move was based on a more aggressive subscriber growth and usage expectations,' Fifer told Reuters. Start-up Microcell, which holds about 10 percent of the Canadian wireless market, posted the second-fastest subscriber growth rate in the industry in the third quarter. Only Rogers Cantel Mobile Communications Inc. (Toronto:RCMb.TO - news), leading the pack with a 44 percent market share, is growing faster, Fifer said. Thanks to an increase in transmission capacity, the typical wireless subscriber is also using cellular communications for a growing range of applications, notably for data transmission. This growth translates into higher revenues and better margins for wireless companies. Fifer says Canada is set to have an impressive surge in wireless subscribers. ``The Canadian wireless sector is red hot. The market as a whole is accelerating at twice the rate of the U.S. market.' The wireless market has also reached a critical penetration rate, he said. One in five Canadians is now subscribing to a wireless service, a threshold after which future growth comes quickly because of the word-of-mouth effect. In the United States, penetration rates stand at around 30 percent, he said. Jonathan Robinson, analyst with National Bank Financial in Toronto, did not fully subscribe to Fife's bullish sentiment about Microcell. Robinson changed his ``buy' recommendation to a ``hold' on Thursday but said he still found the stock appealing on a speculative basis. ``It's a hold on a fundamental basis, but it's the best play on the consolidation game in the U.S.,' he said. ``It's a very interesting speculative buy.' Rumors that U.S. wireless operator VoiceStream Wireless Corp. (NasdaqNM:VSTR - news) could be interested in Microcell have been circulating on the market for nearly a month. VoiceStream, which is building a digital network in the U.S., recently paid $4.7 billion for Omnipoint Corp. (NasdaqNM:OMPT - news) and $1.8 billion to buy Aerial Communications Inc. (NasdaqNM:AERL - news). Microcell stock has been on a roller-coaster ride recently, reaching a 52-week high of 27-5/8 on the Nasdaq on takeover speculation last Friday. It fell to 21-1/2 on Tuesday after a Canadian government decision on future airwave allocation reduced the company's attractiveness to potential suitors. ``We view the spectrum issue as a neutral event,' said Fifer. ``(The recent drop) has more to do about downgrades from Canadian analysts,' Fife said. ``The Canadian guys are covering their shorts, and we are getting more bullish (on the stock) in the United States.' Ottawa announced last Friday it would raise the spectrum cap for wireless communications operators offering cell phone and pager services to 55 megahertz from 40 megahertz. Analysts said the decision provides room for Canadian wireless companies to grow, but mergers would result in allocations that would exceed the new limit set by Ottawa. The government also announced it plans to auction off a big chunk of airwave capacity, which could lead to the arrival of a new rival, bad news for existing companies, analysts said. Capacity available to wireless companies has been capped since 1995 by federal regulations to allow newcomers time to gain a foothold in the market. ($1=$1.47 Canadian)