NEW YORK-CTI Holdings S.A., a pure play wireless carrier serving the interior region of Argentina, plans to place privately up to $150 million to help finance its network construction.
By the end of last year, CTI had deployed 698 cell sites, which covered about 95 percent of the 17.1 million people in its territory. By the end of this year, it plans to complete installation of an additional 231 sites.
The carrier also plans to deploy Code Division Multiple Access technology next year in six cities, which comprise about 38 percent of its population coverage.
Argentina’s interior region encompasses the entire country, except for Buenos Aires, where CTI Holdings is headquartered.
In the northern part of its territory, CTI competes with Telecom Argentina and in the southern portion with Telefonica de Argentina. The Argentine government plans to auction additional wireless telecommunications licenses in these areas in 2001.
“CTI benefits from its relationship with its largest shareholder, GTE Mobile Communications International Inc., [which] allows CTI to benefit from GTE’s purchasing power, resulting in significant cost savings, especially for network equipment,” said Dennis R. Saputo, senior vice president, and Alfred J. Pastore, managing director, of Moody’s Investors Service telecommunications and media group.
“In addition, GTE offers management and operational experience as well as extensive industry knowledge. GTE currently holds a 25.5-percent interest in CTI [and has] the ability to increase its ownership to 55.8 percent through the conversion of shareholder loans.”
The New York City-based rating agency accorded CTI’s planned debt issue a speculative grade rating of B3. Moody’s characterized the carrier’s financial profile as weak due to debt and operational difficulties associated with rolling out coverage. However, it also said it expects improvements due to growing demand for telecommunications services in Argentina, coupled with CTI’s improvement in operating efficiencies and marketing initiatives.
