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Technology Stocks : Broadband Wireless Access [WCII, NXLK, WCOM, satellite..] -- Ignore unavailable to you. Want to Upgrade?

To: wonk who wrote (141)	5/5/1999 12:45:00 AM
From: SteveG	Respond to of 1860

<..My purpose would be to model operating expenses, depreciation and tax shielding, and incremental capx...> Good stuff, WW - thanks for your input! I'm trying to get some analysts to think and print along these lines as well. If you find the time to get more "granular", would look forward to it. couple of links: "Your Dream Team: Bell Atlantic, Wiliams, WinStar and AT&T" americasnetwork.com "Peddling Air" internettelephony.com

To: wonk who wrote (141)	5/5/1999 12:52:00 AM
From: SteveG	Read Replies (3) \| Respond to of 1860

CSFB on VDO: Robert Goff BUY MID CAP Le Groupe Videotron Ltee (VDO.TO) Sale of U.S. MMDS licences for proceeds of C$246 million or $2.13 per share. Target raised $2 to $36. Summary VDO announced the sale of its U.S. MMDS licences to Sprint for US$180 million. We expect VDO to realize roughly US$ 146mm or C$246 mm ($2.13 per share) in cash proceeds. The sale will record a gain of C$136 mm versus the book value of $ 110 mm. Consequently, there will be deferred taxes booked of roughly $46 mm. We do not expect cash taxes on the deal. We had previously noted that we carried these assets at C$30-$ 50 million in our valuations. We acknowledged that we were probably low in our valuation and had kept the difference as a buffer against potential disappointments at OpTel. Our buffer for OpTel seems less necessary given the company's IPO filing. We maintain our Buy recommendation. The shares are currently valued at 9.4 times 2000 cable EBITDA or 4.9 times its core analogue cable after adjusting for new services. Its peers currently are valued at 10.1 times and 7.1 times respectively. Price Target Mkt.Value 52-Week 05/03/991 (12mo.) Div. Yield (MM) Price Range C$ 30.10 C$36 C$0.06 0.2% $3,479.6 $30.50-15.75 Annual Prev. Abs. Rel. EV/ EBITDA/ EPS EPS P/E P/E EBITDA Share 8/99E ($1.33) NA $2.39 8/98A ($0.56) NA $2.92 8/97A ($0.28) NA $1.99 0.00 !Zero Divide Nov. Feb. May Aug. FY End 1999E ($0.26) ($0.33) ($0.32) ($0.42) Aug 31 1998A ($0.07) ($0.11) ($0.13) ($0.25) 1997A ($0.11) ($0.06) $0.02 ($0.13) ROIC (8/98) N/A Total Debt (02/99) $1.7 bil Book Value/Share (02/99) $5.52 WACC (8/98) N/A Debt/Total Capital (02/99) 29% Common Shares 115.6 EP Trend2 N/A Est. 5-Yr. EPS Growth N/A Est. 5-Yr. Div. Growth N/A 1On 05/03/99 TSE 300 closed at 7082.0. 2Economic profit trend. Note: All dollar amounts are in Canadian dollars unless otherwise indicated. Le Groupe Vidëotron ltëe has Canadian subsidiaries in cable television, telecommunications, television broadcasting and interactive multimedia services. Videotron's U.S. assets include private cable/telephony operations through OpTel and wireless cable systems. Investment Summary Sale of U.S. MMDS licences for proceeds of C$246 million or $2 .13 per share. Target raised $2 to $36 VDO announced the sale of its U.S. MMDS licences to Sprint for US$180 million. We expect VDO to realize roughly US$146 million or C$246 million ($2.13 per share) in cash proceeds. The sale will record a gain or C$136 million versus the book value of $110 million. Consequently, there will be deferred taxes booked of roughly $46 million. We do not expect cash taxes on the deal. We had previously noted that we carried these assets at C$30-$ 50 million in our valuations. We acknowledged that we were probably low in our valuation and had kept the difference as a buffer against potential disappointments at OpTel. Our buffer for OpTel seems less necessary given the company's IPO filing. We note that OpTel's indicated range of $15-$17 per share for its US$100 million initial public offering suggests a valuation of $430-$487 million for Videotron's post-split 19. 1mm shares. We maintain our valuation of $450 million or $3. 90 per VDO share for the company's stake in OpTel. With the announced sale, we are raising our VDO target by $2 to $36 to allow for the proceeds. The deal should close for VDO's fiscal year end in August following a positive FCC ruling likely that month. We maintain our Buy recommendation. The shares are currently valued at 9.4 times 2000 cable EBITDA or 4.9 times its core analogue cable after adjusting for new services. Its peers currently are valued at 10.1 times and 7.1 times respectively. Source: Company information and CSFB estimates. N.B.: CREDIT SUISSE FIRST BOSTON CORPORATION may have, within the last three years, served as a manager or co- manager of a public offering of securities for or makes a primary market in issues of any or all of the companies mentioned. Closing prices are as of May 3, 1999, and are shown in Canadian dollars except where otherwise stated. Rogers Communications (RCIb, $27.45, Buy) Shaw Communications (SJR.b, $59.30, Hold) Cogeco Cable (CCA, $29.50, Buy) Sprint (FON, US$104.48, Buy)