Long-distance telco MCI WorldCom Inc. continued its
wireless cable buying spree, snapping up Wireless One Inc. for about $158 million in cash
and debt.
MCI, which already owns about two-thirds of Wireless One's
debt, agreed to pay the full amount due to other debt-holders and to pay holders of
Wireless One stock about $22.6 million in cash, or around $1.31 per share.
According to the company, Wireless One has about $340
million in debt outstanding. Given the fact that MCI already owned 66 percent of that
debt, the company assumed about $135 million in additional debt.
Wireless One holds
multichannel-multipoint-distribution-system licenses to offer high-speed Internet,
data-communications and telephony service in about 11 states in the Southeast. The company
currently provides wireless cable services in seven states, and it also resells DirecTV
Inc. direct-broadcast satellite services.
This is the third wireless cable acquisition for MCI this
year. In April, the company purchased 48 percent of CAI Wireless Systems Inc. for $172
million, and in May, it bought wireless cable systems in California owned by Prime One for
about $300 million.
"Wireless One, along with other recent MMDS
acquisitions, provides another alternative to directly reach customers specifically with
broadband-data services," MCI spokeswoman Barbara Gibson said. However, she declined
to reveal just what MCI's plans for wireless high-speed data are.
Gibson said there are no plans to expand Wireless One's
video offerings, adding that existing wireless cable operations would continue.
Wireless One currently offers wireless cable services to
about 101,000 customers in 39 markets in seven states. The company also has about 3,700
DBS customers.
More important, the deal gives MCI coverage of about 11.2
million homes in 11 major markets in the South and Southeast. Coupled with other MMDS
acquisitions, MCI has wireless coverage of about 50 percent of major markets in the United
States.
About two weeks ago, MCI also increased its stake in CAI to
more than 60 percent, purchasing 2.4 million shares of the company's stock on the open
market for $66.8 million.
According to documents filed with the Securities and
Exchange Commission, MCI began purchasing CAI shares in small blocks -- 2,500 shares July
2, 76,500 July 6, 5,000 July 7 and 30,000 July 9 -- at between $27.68 and $27.95 apiece.
Also on July 9, MCI purchased 2.27 million shares of CAI
stock at $28 each, or $63.6 million. Including the 8.4 million shares MCI purchased in
April, the long-distance giant controls 10.7 million shares of CAI, or 61.9 percent of the
company's common stock.
In its Federal Communications Commission filing, CAI also
revealed that MCI controls about $239 million worth of 11.25 percent senior notes of CS
Wireless Systems Inc., a CAI subsidiary based in Plano, Texas, which passes 7.7 million
homes.
MCI started buying MMDS properties in March, torching a
bidding war with long-distance telco rival Sprint Communications Co., which has also been
buying stock and debt in wireless cable providers.
