AKLS intraday double bottom ... Alaska Telecom
October 8, 1999
ALEC HOLDINGS INC (ALSK)
S-1 Filing (SEC form S1)
We are the leading diversified, facilities-based telecommunications provider in Alaska, offering local telephone, wireless, long distance, data and Internet services to business and residential customers throughout the state. We are the only telecommunications provider in Alaska using its own network facilities to provide end-to-end communications services to its customers.
LOCAL TELEPHONE. With over 320,000 access lines, representing 75% of the access lines in Alaska, we are the largest local exchange carrier in Alaska and the 15th largest in the U.S. We provide service to all of the state's major population centers, including Anchorage, Juneau and Fairbanks.
WIRELESS. We are the largest and only statewide provider of wireless services in Alaska, currently serving over 70,000 subscribers. Our wireless network covers over 460,000 residents, including all major population centers and highway corridors. We are in the process of upgrading our network to be fully digital in all of our service areas by year-end 1999.
LONG DISTANCE. We provide long distance and other interexchange services to approximately 26,000 customers primarily in Anchorage and intend to market these services statewide beginning in the first quarter of 2000. We recently migrated long distance traffic from leased circuits onto our own network infrastructure, which we believe will result in significant cost savings over time.
DATA AND INTERNET. We are the third largest provider of Internet access services in Alaska, with approximately 16,000 customers. We also own 28.5% of the second largest Internet services provider in Alaska, with approximately 28,000 customers.We currently offer dedicated and dial-up Internet access to our customers and intend to offer digital subscriber line, or DSL, services by year-end 1999.
Our telecommunications network includes over 485 miles of fiber optic cable, 176 switching facilities and a statewide cellular network. In addition, we recently purchased fiber capacity for high speed links within Alaska and for termination of traffic in the lower 48 states. We plan to continue enhancing our network to meet customer demand for increased bandwidth and advanced services.
For the year ended December 31, 1998, on a pro forma basis, we would have had combined revenues of $281.6 million,operating income of $40.6 million, Adjusted EBITDA, as defined under "Summary Unaudited Pro Forma Combined Financial and Operating Data", of $106.1 million and a net loss of $17.3 million.
We were formed in 1998 by Fox Paine & Company, LLC, members of the former senior management team of Pacific Telecom, Inc., and other experienced telecommunications industry executives. In May 1999, we acquired the Alaska telecommunications properties of Century Telephone Enterprises, Inc. and substantially all of the assets and liabilities of the Anchorage Telephone Utility, or ATU. Century's Alaska properties were the incumbent provider of local telephone services in
Juneau, Fairbanks and more than 70 rural communities in Alaska and provided Internet services to customers statewide. ATU was the largest local exchange carrier in Alaska and provided local telephone and long distance services primarily in Anchorage and cellular services statewide.
OUR BUSINESS OPPORTUNITY
Alaska is characterized by its large geographic size, widely dispersed population and large distance between urban areas. Over 60% of the state's population resides in its three largest cities, Anchorage, Juneau and Fairbanks. Alaska lacks an effective ground transportation infrastructure, and many of the state's communities are accessible only by air or water. As a result, Alaskans are particularly dependent on telecommunications services to access resources and information unavailable in their communities. We estimate that Alaskan telecommunications businesses generated aggregate revenues of $1 billion in 1998.
Alaska's income and demographic characteristics provide opportunities for significant growth of telecommunications services. Alaska has the highest median household income in the U.S. In addition, Alaskans pay no state personal income taxes and receive an annual per capita payment from the Alaska Permanent Fund. The population in Alaska has been growing at a compound annual rate of 1.3% over the last ten years, compared to 1.0% for the U.S. as a whole. The U.S. Census Bureau projects that Alaska's population will grow at a compound annual rate of 1.9%, as compared to 0.8% for the U.S. as a whole,
through 2005.
We believe that the outlook for growth in our businesses is favorable due to the fundamental demand for telecommunications, including:
- continued demand for core telephone services and enhanced service offerings, such as voice mail and call waiting,
- access line growth due to population growth and the demand for multiple lines,
- increasing demand for wireless services and
- DSL and Internet access growth due to higher business and consumer
bandwidth needs for data and Internet services.
OUR BUSINESS STRATEGY
As part of our business strategy, we intend to:
LEVERAGE OUR NETWORK AND CUSTOMER BASE. Our competitive position as the leading diversified,
facilities-based telecommunications provider in Alaska affords us a valuable opportunity to capitalize on the growing demand
for communications services. In particular, we intend to:
PROVIDE ONE-STOP COMMUNICATIONS SERVICES. We intend to offer a complete suite of telecommunications and
data services, including:
- local telephone,
- wireless,
- long distance and
- data and Internet services.
INCREASE PENETRATION OF ENHANCED SERVICES. We seek to achieve a higher penetration of high-margin
enhanced services. Offered services include:
- call waiting,
- caller ID,
- call forwarding and
- voice mail.
OFFER COMPLEMENTARY COMMUNICATIONS AND MEDIA SERVICES. We currently offer ISDN and other
high-speed data services and intend to expand our service offerings to include:
- DSL services by year-end 1999,
- virtual private networks and
- statewide Centrex services, such as four-digit dialing.
PROVIDE SUPERIOR CUSTOMER SERVICE. We are committed to building strong customer relationships by providing
high-quality customer care. We intend to increase customer loyalty and retention by:
- improving call response times,
- providing one-call customer solutions and
- offering online customer account management services.
BUILD THE LEADING COMMUNICATIONS BRAND IN ALASKA. Through future promotion of all of our service
offerings under the "Alaska Communications Systems" brand name, we intend to take advantage of our statewide presence and
centralized marketing to:
- build superior brand awareness,
- drive greater penetration of our products and services and
- create higher demand for premium-priced branded services.
REALIZE OPERATING EFFICIENCIES. We seek to realize significant operating efficiencies by:
- eliminating duplicative overhead from our recent acquisitions,
- investing in new cost-effective information technology and
- creating an integrated, low cost network.
PURSUE SELECTED STRATEGIC ACQUISITIONS. We intend to pursue selected investments in or acquisitions of: |
