SBC Wireless (U.S.): Releases Benchmark Report

Linda Scott/Paul Holman

 

416-593-5577 x2245 / x2234

 

e-mail: lscott@dbrs.com

 

SBC Wireless, the domestic wireless operations of SBC Communications Inc., is the third largest wireless provider in the U.S.A. Its domestic wireless operations serve both local cellular services and PCS (personal communication services), as well as wireless long distance, to 11.2 million subscribers in 23 of the 35 largest cellular markets. SBC Wireless’ networks cover 117 million people and are scattered throughout the U.S.A. with clusters in the West Coast, and central states.

 

SBC Wireless is one of the last remaining telco wireless providers that does not have a national footprint and, as such, the recent announcement of a merger between its wireless operations with those of BellSouth was expected. BellSouth’s wireless operations was the likely choice in partners, filling in a coverage gap in the southeast with only a marginal overlap of markets covered and similar technology platforms. The merged entity will be the second largest wireless provider in the U.S.A. with 16.2 million subscribers and reaching 40 of the top 50 U.S. markets. Despite the enlarged coverage area, the merged entity will still not have national coverage. Additional acquisitions are likely to fill in the geographic coverage, particularly in the Northwest and Northeast. SBC Wireless’ capex has remained stable over the past year. However, capex will likely increase with the planned conversion of the technology platform of the networks acquired from Ameritech.

 

While SBC Wireless has the financial support of a large telco for the technology conversion, the capex per subscriber ratio may rise with the conversion as compared to the declining trend in the industry. Revenues and EBITDA are expected to continue to increase with the growth of the subscriber base but will continue to experience downward pressure from declining average revenue per user related to reduced pricing and bundle pricing packages due to increasing competition.

 

 

For those interested in receiving a copy of the above report, please contact DBRS: info@dbrs.com.

 

Additional information of the United States Wireless Industry can be found in the upcoming DBRS Industry Study to be released in May 2000.