NEW YORK-American Portable Telecom Inc., Chicago, reported disappointing third quarter financial results last week, but said it is on track for the early 1997 launch of its personal communications service in six major trading areas.
APT, whose majority owner is Telephone and Data Systems Inc., owns PCS licenses in the major trading areas of Minneapolis, Tampa-St. Petersburg-Orlando, Fla., Pittsburgh, Kansas City, Mo., and Columbus, Ohio.
Karen M. Stewart, vice president of investor relations, reported a $9.8 million loss for the third quarter, or 14 cents per share of common stock, compared with a $1.3 million loss, or two cents per share, during the same quarter of 1995.
APT, which anticipates investing $300 million in capital expenditures by year end, expects to launch service with 500 cell sites in place “for wide-area metropolitan coverage,” Stewart said. Within 12 months of starting commercial operation, APT expects to complete a second phase of system buildout that will add another 500 cell sites.
“We are very pleased with the progress made to date on our ambitious buildout plan,” said Don Warkentin, chief executive officer of APT. “Everything is on track for our early 1997 launch in all six markets.”
Seven microwave paths out of 226 still needed clearance, J. Clarke Smith, chief financial officer, said. But even without them, APT can launch commercially, he said.
Smith said “friendly user tests” involving about 400 customers in a market he wouldn’t identify, are scheduled to begin late this year, as are technical trials. Staged commercial launches will occur in the first quarter of next year, but Smith said APT hasn’t yet chosen the first market to be launched commercially.
He added that APT expects to make public the brand name for its new PCS service next month. The brand also will cover a joint venture with Rural Cellular Corp., covering an area with a population of 500,000 in which APT “has no short-term buildout plans.” APT is 49 percent owner of the joint venture with Rural Cellular, headquartered in Alexandria, Minn.
Early this year, APT sold an initial public offering of common stock at an opening price of $17 per share. Asked about Korea Telecom’s expressed interest in making a $50 million equity investment in APT, Smith offered this response: “We are fortunate to have the funding we need through 1998. No agreements have been reached [with Korea Telecom or other potential investors whose pursuit is part of APT’s financing strategy]. The issue looming largest is that the current market value doesn’t reflect the true value of the company [which is closer to] the initial public offering price.”
Early this year, APT’s IPO opened at $17 per share. Its stock closed Oct. 15 at $9.25 per share.
Meanwhile, APT is planning soon to sell privately an issue of 10-year zero coupon notes with proceeds of approximately $100 million. The debt issuance “will be used to satisfy certain obligations of APT under a vendor financing agreement with Nokia (Corp.),” according to Moody’s Investors Service Inc., New York.
