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

To: GVTucker who wrote (288)	6/2/1999 3:08:00 AM
From: SteveG	Read Replies (1) \| Respond to of 1860

From BoA (nee NBMO) Securities Mike Renegar: Fixed Wireless Stocks Up Significantly After Strategic Investments; Reiterate Buy Shares of Teligent (TGNT, $55 1/4) and Advanced Radio Telecom (ARTT, $12 7/16) are up approximately 15% today as strategic investments were announced. Liberty Media announced the intended purchase of The Associated Group (AGRPA, $62 1/16), which owns approximately 40% of Teligent. Qwest (QWST, $40 3/8) in conjunction with a group of private equity investors signed a definitive agreement for a $251 million investment that will expedite the deployment of ART's high-speed wireless network. We believe these actions this morning are another solid backing from key industry players about the viability of wireless broadband. We would be buying WinStar on today's news as we continue to believe they are the furthest along in deploying advanced wireless networks and would ultimately be a very attractive acquisition candidate. Today's news in a nutshell, emphasizes once again that investors are willing to put strategic money in the fixed wireless sector. In our opinion, both investors got a significant ownership piece at attractive prices with today's transactions. In the case of Advanced Radio Telecom, the company had been looking for cash for some time now and was not in the position to negotiate favored pricing. Qwest invested $90 million for a 19% interest in ARTT. Other investors include Oak Investment Partners, $40mm; MeriTech Capital Partners, $25mm; Advent Int'l, $20mm; Columbia Capital, $20mm; Accel Partners, $15mm; Brentwood Venture Capital, $15mm; Worldview Technology Partners, $15mm; Bessemer Venture Partners, $8mm; and Adams Capital Mgt, $3mm. In the case of Teligent, Liberty Media (LMG.A, $65 7/8) took the back-door method by acquiring The Associated Group, which owns approximately 40% of Teligent. AT&T (T, $55 1/8) is ultimately behind Liberty and we believe they view this as another strategic equity investment that could ultimately help in connecting business customers, whereas the cable play is a residential solution. WinStar is furthest along in the deployment of buildings roof rights at 5,500, markets in service at 30, hub sites in service 85, with nearly 50 additional in the near future. We feel WinStar's dominant position is only beginning to be appreciated as they continue to report record results quarter after quarter. We feel these actions today solidify our thoughts that broadband wireless will be a true alternative to the Bell Company networks and will be valued highly. AT&T, Sprint (FON, $111 13/16), Qwest, and Level3 (LVLT, $74 1/2) are all in need of alternative ways of reaching the customer. We reiterate our BUY recommendation on shares of WCII and believe the shares will trade closer to our $67 private equity value. Quick Company Comparisons Teligent - Teligent is in our view the closest competitor to WinStar today as far as network deployment and breadth. In our opinion they are about 12+ months behind WinStar in network deployment (switches, hub sites, etc.) but are building very quickly. We believe WinStar is further ahead in customer acquisition maturity. We estimate they have approximately 1/2 the amount of spectrum capacity as WinStar and operate in major markets going after small and medium size customers. We believe Teligent will be an attractive acquisition candidate similar to WinStar as they continue to build value. Advanced Radio Telecom - Advanced Radio Telecom has been struggling over the last few years with funding and rolling out their business plan. With today's announced equity investment from Qwest and others for $251 million we believe they may finally be off to a real start. As of now, ARTT focuses on data applications only and is somewhat limited in that their bandwidth per market is only 100-300MHz compared to an average of 800MHz for WCII. Advanced Radio may become part of other wireless players as their national license would offer additional complementary markets in addition to depth in key markets. Although diluted now, WinStar still owns approximately 8-10% of ARTT. Some key metrics compared: Advanced Radio Teligent WinStar 1Q'99 Revenues ($000s) $226 $1,523 $88,093 Lines In Service 1,500* 17,600 384,000 Hub Sites Installed 1Q 15* 60 79 Building Rood Rights 216 3,100 5,500 Markets in Service 3 27 30+ Total Spectrum in top 50 Mkts. (MHz) 7,700 12,640 31,050 ~~~~~~~~~~~~~~~ also Message 9900058