To the Editor:
I read with some interest Mr. Angelmyer’s diatribe on the lack of a “white knight” to save MobileMedia from extinguishing its equity. In candor, his letter carries the tone of a woman scorned, or, more appropriately, of an investor burned.
The wireless industry does hold tremendous promise and potential. Witness the LMDS auctions, in which millions of dollars have been bid. Witness the new PCS carriers, who have devoted billions of dollars in licenses and infrastructure. Witness the incumbent cellular carriers, many of whom have expanded their national footprint during the PCS auctions.
The problem, unfortunately, lies in MobileMedia. With a crushing debt load and a segment-paging-that many analysts feel may be “squeezed,” the prospect of turning it around appears bleak at best. Mr. Angelmyer argues that its 3.5 million customers and its infrastructure is worth something-so they are. But in a liquidation scenario, competitors can pick up customers and infrastructure on the cheap. Other wireless carriers have high amounts of debt? True. But if you assume equity of approximately $150 million against $1.3 billion of debt-any financial ratio you calculate will look damning at best. I doubt that other carriers have ratios that look so adverse.
As my MBA professors would say-let’s turn this on its head. Investors-large and small-are willing and waiting for great investment opportunities. Craig McCaw recently agreed to invest more than a billion dollars with Nextel during the next several years. Sprint PCS recently bought the remaining partnership interest in Sprint Spectrum. If MobileMedia was such a good deal, you would think that someone would have taken advantage of the opportunity by now.
Since Mr. Angelmyer chose to use “High Plains Drifter” as an analogy, let’s extend it-I’d say MobileMedia is more like the crippled old horse who’s time has come.
Do not misunderstand me. The failure of any company is a tragedy. It translates into loss of jobs for employees, loss of money for investors, and the loss of hopes and dreams for its founders. But let’s not hastily blame the wireless community for this tragedy. That would be unfair-and unjust.
Patrick Chang
