NEW YORK-Despite losses associated with ongoing construction of a personal communications services network, the third-quarter financial performance of Omnipoint Corp. was ahead of analysts’ expectations, company executives said.
Omnipoint Corp., Bethesda, Md., reported revenue of $13.9 million for the latest quarter, compared to no revenue at all for the start-up carrier a year earlier. It accumulated a third-quarter loss of $81.2 million, or $1.57 per common share, as opposed to $27.9 million, or 55 cents per share, during the third quarter of 1996.
The PCS provider closed the quarter with 80,000 subscribers, only a few hundred of which are outside the New York City metropolitan area, said George Schmitt, president of Omnipoint Communication Services, Mountain Lakes, N.J., the PCS operating entity. Average monthly revenue per subscriber was $65.
“Our revenue directly reflected subscriber growth, and we are pleased with the results,” said Bradley Sparks, chief financial officer of Omnipoint Corp.
“Our loss reflects our costs of building out our network and is slightly better than the sell side analysts’ consensus of $1.59 per share.”
Capital expenditures per covered population equivalent have averaged $17, Schmitt said. In the Detroit and Indianapolis areas, to which the carrier dispatched engineering personnel early this month, capital expenditures could rise to $20 per covered pop, he said.
“We have tentatively selected a supplier but have not yet completed the financing agreements with them. We won’t announce who won the supply contracts until we complete the financing, which you should expect to be as favorable as the financing announced during the third quarter [from] Ericsson (Inc.) in our Boston and Miami markets.”
Omnipoint Corp. closed the quarter with $228.6 million in unused vendor financing out of a $1.3 billion in total vendor financing commitments. It also has available another $106.9 million in cash and cash equivalents.
“We’re fine from a liquidity standpoint,” Sparks said.
In late September, Omnipoint opened much of the Long Island, N.Y., area and its Philadelphia and Wichita, Kan., markets to commercial service, Schmitt said. In late October, Omnipoint connected its switch in Hartford, Conn., and it expects to do likewise in Boston and Miami by Thanksgiving so that networks for the latter two markets can be turned on by the end of March, Schmitt said.
“The only area of disappointment in network buildouts is in New Jersey where there are some issues with the [N.J. Department of Transportation] and the contract we have with them,” he said. “We hope, after the election, that things will get straightened out. But working with politicians, you never know.”
