NEW YORK-Rogers Wireless Inc., Toronto, has raised $400 million through a 10-year issue of senior secured notes, which it will use to finance the costs it anticipates through 2003 for construction of a new third-generation network.
Formerly known as Rogers Cantel, the carrier recently acquired 23 new 3G licenses, including 10 megahertz to 20 megahertz of spectrum in all major markets. It paid the full $394 million price for these through the sale of stock. Moody’s Investors Service Inc. said April 18 it had assigned the new debt issue the lowest level investment-grade rating of Baa3 and gave it a “stable outlook.”
Rogers Wireless, owned one-third by a partnership between AT&T Corp. and British Telecom plc, provides digital network coverage to 83 percent of Canada’s population and analog coverage to 93 percent. The involvement of the outside carriers likely will help Rogers Wireless enhance its economies of scale and tap into third-generation wireless innovations, in Moody’s view.
With about 2.6 million mobile voice customers, the market share of Rogers Wireless is about 29 percent, slightly more than each of its two competitors, Bell Mobility and Telus. Competition from newer personal communications services providers licensed by the federal government initially caused Rogers Wireless to experience increased customer turnover and stagnant subscriber growth, according to Moody’s.
“Management’s early attempts to reinvent itself through new marketing and pricing plans stumbled until the company underwent a restructuring,” said Neil P. Begley and Robert Konefal, analysts for Moody’s Media, Telecom and Technology Group. “With a more competitive cost structure in place and effective new price plans, subscriber growth rebounded in 1999 and 2000, with 24 percent and 17 percent growth respectively, as the strength of the company’s dominant network became paramount.”
