DENVER-U S West Wireless said it added nearly 60,000 customers during the third quarter, reaching a weighted average penetration rate of 2.6 percent.
The personal communications services carrier said it ended the third quarter with 344,000 customers. Average revenue per user reached $58, with total quarterly revenue of $69 million, up 176 percent from the previous year.
U S West Inc. said more than 75 percent of the company’s third-quarter revenue growth came from data- and wireless-related products. U S West’s total sales and revenues reached $304 million, an 18.1-percent increase from third-quarter 1998. U S West’s earnings per share were 83 cents. Net income was $139 million.
U S West Communications Inc., a wholly owned telephone operating subsidiary of U S West Inc., had hoped to garner $500 million in a debt private placement last week, but instead was able to raise $750 million in five-year notes, priced to yield 7.246 percent.
Salomon Smith Barney was lead manager for the Oct. 26 sale of debt, which received investment grade ratings of A2 from Moody’s Investors Service Inc. and A-plus from Standard & Poor’s Corp. Proceeds will be used to refinance commercial paper.
However, S&P cautioned it has placed the rating of U S West Communications’ debt on “CreditWatch with negative implications … reflecting the pending acquisition of U S West by Qwest Communications International Inc.”
Standard & Poor’s has accorded a lower investment-grade rating of BB-plus to Qwest’s debt, which the agency has placed on CreditWatch with positive implications.
The uncertainty in terms of S&P’s evaluation relates to the fact that the merger is not expected to close until mid-2000 at the earliest.
“Intervening market or regulatory factors beyond management’s control that could weaken the combined entity’s business risk are possible,” Standard & Poor’s said Oct. 26.
“In particular, the [Federal Communications Commission] could attach a number of merger conditions requiring the combined Qwest/U S West to spend additional material amounts of cash on infrastructure to receive [FCC] approval.”
