Despite filing for bankruptcy last year, MobileMedia Corp. announced plans to build out networks for its two nationwide narrowband personal communications licenses, with service available to select markets later this year and the initial phase completed by early 1999.
“Commencing the buildout of our NPCS networks symbolizes the turnaround (MobileMedia) is undergoing,” said Ron Grawert, MobileMedia chief executive officer. MobileMedia, which currently is undergoing a financial restructuring after filing for bankruptcy early in 1997, “has made great improvements both operationally and financially that allow us to take advantage of these valuable assets we possess and invest in the future of the dynamic advanced wireless messaging business.”
MobileMedia, which today owns and operates two national one-way networks, would not divulge exactly how much it intends to invest in this new infrastructure, but company spokeswoman Krista Grossman said it was a “significant amount.”
Exactly how MobileMedia will pay for its network buildout has not been determined. The company has a $200 million debtor in possession loan from Chase Manhattan Bank of New York at its disposal, but to date has been reluctant to use it, preferring instead to draw from its operational revenues.
According to Grossman, if the company is still in Chapter 11 restructuring when buildout commences, it will request to use the DiP funds. But if the Chapter 11 process is complete by the time buildout begins, the company plans to pay for it through other means. “It just depends on the timing,” she said.
Grossman said the restructuring process is “going as we hoped” and that planning such an investment is in line with an eventual comeback. “We’re obviously investing pretty heavily in the future,” she said. “This makes sense.”
MobileMedia first entered the NPCS game in September, when it announced it would resell Mobile Telecommunication Technologies Corp.’s two-way services. At the time, Grawert said “we’ll be able to offer advanced messaging services to our customers and gauge market demand before making additional narrowband investments up front.”
But according to Grossman, the decision to invest in an NPCS network was in no way related to that resale agreement, which she said hasn’t gotten underway yet.
“We have been doing our own off-line customer research and determined that there is the demand for this,” she said.
The company said it is mainly attracted to the greater efficiency of spectrum an NPCS network would provide, which in turn is expected to result in lower network costs to the subscriber. In particular, Grawert pointed to increased alphanumeric capacity.
“Industry trends reveal a healthy growth in demand for alphanumeric products, the demand for which we believe will be enhanced by the addition of a guaranteed receipt feature,” he said. MobileMedia also said it might offer “limited quantities” of two-way text services if there is sufficient demand.
