NEW YORK-Moody’s Investors Service, London, assigned a speculative grade rating of Ba3 to Orange plc’s planned private placement of $562 million in 10-year senior notes.
“The Ba3 rating factors in the risks associated with Orange’s funding of its capital … requirements to provide sufficient capacity … for customer growth … [and] allowing for the possibility of bidding for a [Universal Mobile Telecommunications System] license and developing a UMTS network,” said Eric de Bodard, managing director, and Carlos Winzer, senior credit officer, of Moody’s European corporate ratings group.
“We also have factored in (Orange’s) plans to grow its business in other markets in Europe, taking advantage of its expertise as a [Global System for Mobile communications] operator and (its) strong brand.”
London-based Orange has about 2.6 million customers on its GSM 1800 network in the United Kingdom, giving it a 17-percent market share. In March 1998, by comparison, Orange had 1.4 million customers.
Orange boasts the lowest call blockage and call-drop rates in the country, which is experiencing rapid overall wireless subscriber growth, the Moody’s analysts said. However, they also said they expect gradually increasing competition, which could pose a challenge to existing carriers such as Orange.
Like many other European operators, Orange’s name has been bandied about as a carrier that may want to invest in U.S. GSM carriers. Hutchison Whampoa Ltd. owns a 45-percent stake in Orange.
Two Hutchison subsidiaries also hold a combined total of 24.9 percent of Western Wireless Corp., a GSM personal communications services carrier based in Issaquah, Wash.
Western Wireless and Omnipoint Corp. are founding members of the North American GSM Alliance.
