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Technology Stocks : Leap Wireless International (LWIN) -- Ignore unavailable to you. Want to Upgrade?

To: pcstel who wrote (1728)	3/12/2002 9:10:51 PM
From: pcstel	Read Replies (1) \| Respond to of 2737

Here is a Good One for you! Chasetel has ownership of a BTA in Middelsboro, KY. The transfer of that BTA is part of a complicated transaction between NTCH and LWIN. NTCH is the company that we involved in a JV with up in Idaho. Anyway, I was looking through Buildout notifications and found this. "The Middlesboro BTA presented unique challenges to Chasetel and NTCH in the development and implementation of a service plan that would satisfy the construction requirements on an economically rational basis. The Middlesboro MTA is located near the Cumberland Gap in the lower Appalachian mountains, at the junction of Kentucky, Virginia and Tennessee, one of the most undeveloped regions in the continental United States. There is virtually no industry in the BTA and the commercial activity tends to be on a very small scale. The BTA is by far the smallest and most rural of the three BTAs which make up the Knoxville MTA – according to the 1990 Census, the entire BTA has a total population of only 121,217. This rural population is spread out in remote hollows and valleys with no significant cities or population clusters, and has an average population density of only 75 people per square mile. In fact, none of the four counties that comprise the BTA have a population of more than 37,000. The small and diffuse population in this very rural BTA makes it very difficult to efficiently provide significant numbers of consumers with adequate PCS service. Moreover, the impediments to radio frequency propagation presented by the mountainous terrain of the BTA makes offering adequate service even more difficult. The number of cell sites needed to serve one quarter of the population in the BTA could not possibly have justified the expense in terms of the economic return. Chasetel and NTCH therefore examined the market for special niches which needed and could support a new PCS service, and found such a market in Lincoln Memorial University (“LMU”) and the surrounding community. LMU is the largest educational institution in the BTA. It has a student body of approximately 1700 students and a staff of 200. Located in Harrogate, Tennessee, LMU is not only a major regional educational institution in the Tri-State area, but one of the largest.. The telephone service previously available to students was inadequate. In order to provide LMU and its community with more and better wireless options, Chasetel and NTCH developed a specialized service offering named “CollegeTown PCS.” CollegeTown PCS is designed to address the particular needs of students and the associated educational community in niche markets like LMU. “College towns” have unique communications requirements in terms of price, coverage, and intermobile connectivity, that the CollegeTown PCS service can address very effectively and at a price that is affordable to LMU students and the surrounding population. CollegeTown PCS gives students – who would otherwise rely on dormitory payphones or shared phones in the university network – economical access to personalized wireless phone service. With CollegeTown PCS students, faculty and staff can communicate with each other in real time on their PCS mobiles with no intermobile per minute charges for about $19.95 per month. The CollegeTown PCS service offered at LMU also recognizes that many of the students at the University have family and friends in the Knoxville area and therefore treats calls to Knoxville as free local calls. At present there is no other PCS service provider in the area, and the cellular coverage is spotty at best with insufficient signal strength for in-building service. The CollegeTown PCS service therefore presents a very attractive and economical alternative to cellular for the LMU community. A map highlighting the service area for the university and the surrounding area is attached as Exhibit B. collegetownpcs.com PCSTEL

To: pcstel who wrote (1728)	3/13/2002 8:32:29 AM
From: Robert J. Irvin	Read Replies (1) \| Respond to of 2737

Thanks for your analysis. Is there any color on the capex? Say, if your estimated $65 million is spent or committed by October 2002, what comes due in 2003? What I am really looking for is a reasonable "worst case" view of Leap's sources of cash and uses of cash in 2002 and 2003, making the positive assumption that Leap executes its business plan of growing Cricket subscribers cost effectively. To start, let's discard the notion of "new money", since we're looking at the worst case. For the "worst case", let's also assume that the Auction 35 deposit is not available to be spent. I'm pretty sure there are some "uses of cash" required for vendor financing interest and principal payments starting in the fourth quarter. I'm hoping that the extra capex funds are a source of this cash, one way or another. You say that if Leap executes its plan, it will be EBITDA positive going forward in 2003. What I'm wondering is whether cash flow will be sufficient for Leap to pay its debts as they come due, before Leap reaches cash flow positive. Until Leap's ability to pay its debts as they become due is addressed, it seems to me that "reorg" or at least "recap" pricing of the stock isn't so crazy.

To: pcstel who wrote (1728)	3/13/2002 3:09:24 PM
From: rharshman	Read Replies (1) \| Respond to of 2737

The EBITDA projection by Harvey of minus 78M for the year is very comforting. I hope it proves correct. However, the EBITDA is before about 216M of net interest expense, thus the negative cash flow being projected for 2002 is close to 300M BEFORE capital expenditures and debt retirement. After that things begin to look very rosy. But unless I misinterpret the figures, the company will be going through a very tight cash funnel this year. If that can be solved we can start worrying about using up the large tax loss carryforward before it expires. But it is a legitimate concern at this time and I hope management plans for dealing with it will be discussed with clarity at the next quarterly conference call if not before.