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Technology Stocks : Clearnet, the Canadian wireless play (CLNTF) -- Ignore unavailable to you. Want to Upgrade?

To: Ken Turetzky who wrote (196)	5/26/1999 2:49:00 PM
From: Steve Stinson	Read Replies (1) \| Respond to of 214

I agree. The numbers did not disappoint. Clearnet is undoubtedly paying more for its debt that an investment grade company, but not 25%. There certainly is an appetite for their paper, so their prospects can't be that bad. If I recall correctly, Clearnet was the first significant Canadian issuer to actually float a high-yield issue in Canada. In any event, this is how wireless companies are financed. What I find especially encouraging about Clearnet's strategy is their cautious approach to growth. Unlike Microcell, they do not want to add subscribers unless there is a reasonable prospect that they will actually make money from them. In other words, they have properly avoided the internet business model. Although the last to roll out a pre-paid offering, the pricing features of their Say When plan are aimed at attracting a better quality customer, as well as ensuring that new subscribers actually use the service. This cautious approach helps keep churn rates down, reduces marketing costs of obtaining new clients, and increases the likelihood of moving their customers into higher-margin services. Overall, Clearnet's clientele is fairly secure, with the highest revenues per subscriber. This is why the market is willing to pay a premium for the company. I'm sure potential acquisitors also recognize this value. Steve