vB Easy Archive - Fido/Microcell article

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Fido/Microcell article
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Posted by: AIRrunner

http://www.canadianbusiness.com/tech100/article5.htm

Might interest some of you.

Posted by: zerokarma

Nothing really new in that article, most of that info has already been posted before in other articles.

Posted by: TELUSMobilityGuy

Doesn't look good.

Posted by: the professor

No it dosnt

Hopefully there stocks gain some more value so Microcell (Fido) can stay alive.

Posted by: cellman

How much more value would the stock need to gain to run for at least 3 more yrs...?

Posted by: TELUSMobilityGuy

Forget about the stock. As of June 21, the Toronto Stock Exchange has de-listed the Microcell stock... It's down below 14 cents now.

Posted by: Fried Bacon

Actually the stock remains active it's just been removed from the S+P/TSX 300. Please be sure of your facts before posting.

Posted by: Vindicator

Ya, but the TSX 300 is the primary exchange. Now it's just penny stock!

Microcells main problem (other then cash) is the network footprint. No business person will rely on Microcell because they just don't have the coverage. Thats whats holding the ARPU back. They are trying to make money of low usage subscribers when theres no money to be made in that market.

The smartest thing Fido could do at this point is:

1) Use whatever cash is left and build out the network on the cheap. Pick a company like Bell, Telus or Rogers and try to get co-location agreements for all of their sites at once. And focus on Ontario. Fido's biggest market is Ontario and Quebec. What are they thinking? Alberta is another area which has high ARPU. Focus on those areas and forget less profitable ones.

2) Get a roaming agreement with Rogers. I don't know how they'd do it or what they would offer in exchange. Even if they only broke even on it they need to increase the footprint.

Posted by: OwenX

Quote:

Originally posted by Vindicator
Ya, but the TSX 300 is the primary exchange. Now it's just penny stock!

TSX 300 is not an exchange, it's an index. The list of 300 stocks picked for this index is selected by McGraw-Hill Co., an American book publishing company. Regrettably, they don't get to list or de-list companies from Canadian exchanges, or even from US ones, for that matter.

Quote:

Originally posted by TELUS
Forget about the stock. As of June 21, the Toronto Stock Exchange has de-listed the Microcell stock... It's down below 14 cents now.

Microcell has not been delisted by the Toronto Stock Exchange. It has been delisted by the NASDAQ. As Fried Bacon said, check your facts first.

--Owen

Posted by: Helmsley

Fido has finally woken up in Toronto, they are running alot of ads in the paper pushing the fido business 45.00 plan and the 50.00/ gprs plan. They should have stared pushing business accounts years ago instaead of pushing prepaid (formerly fidomatic).
That's my 2 cents worth, I'm not a President or CEO.

Quote:

Originally posted by Vindicator
Ya, but the TSX 300 is the primary exchange. Now it's just penny stock!

Microcells main problem (other then cash) is the network footprint. No business person will rely on Microcell because they just don't have the coverage. Thats whats holding the ARPU back. They are trying to make money of low usage subscribers when theres no money to be made in that market.

The smartest thing Fido could do at this point is:

1) Use whatever cash is left and build out the network on the cheap. Pick a company like Bell, Telus or Rogers and try to get co-location agreements for all of their sites at once. And focus on Ontario. Fido's biggest market is Ontario and Quebec. What are they thinking? Alberta is another area which has high ARPU. Focus on those areas and forget less profitable ones.

2) Get a roaming agreement with Rogers. I don't know how they'd do it or what they would offer in exchange. Even if they only broke even on it they need to increase the footprint.

Posted by: OwenX

Quote:

Originally posted by the professor
Hopefully there stocks gain some more value so Microcell (Fido) can stay alive.

Quote:

Originally posted by cellman
How much more value would the stock need to gain to run for at least 3 more yrs...?

Cellman and the professor: Stock price has nothing to do with financial viability of a company.

Take, for example, the Burlington based Nexus Group International. It trades on the Toronto Stock Exchange, and for the past 17 years has traded well under $1, recently around $0.06. To the best of my knowledge, the company--just like Microcell--has not had a single profitable year so far.

As long as investors (both shareholders and creditors) are willing to bankroll the operation, a company can stay in business. As I've shown here before, Microcell has sufficient liquidity for several more years, regardless of whether their stock trades at $14, $0.14, or doesn't trade at all.

--Owen

Posted by: TELUSMobilityGuy

I didn't say the stock hadn't been issued, I was merely implying that it is probably not rated as a buy or a strong buy nowadays, so thus it would probably be a wise idea to forget about buying it.

Perhaps I should have been more clear...

Quote:

Originally posted by Fried Bacon
Actually the stock remains active it's just been removed from the S+P/TSX 300. Please be sure of your facts before posting.

Posted by: TELUSMobilityGuy

Like I said... AS OF JUNE 21... which is one week in the future

Today is only June 14.

My source on this info is CTV Newsnet, so I think they're pretty reliable.

Quote:

Originally posted by OwenX

Microcell has not been delisted by the Toronto Stock Exchange. It has been delisted by the NASDAQ. As Fried Bacon said, check your facts first.

--Owen

Posted by: Fried Bacon

CTV Newsnet's reporting may be reliable but your reading of it isn't. So one more time for you Telus and your fading credibility.

"Financial Post - Friday June 14, 2002

Standard & Poor's turfed 23 companies from the S&P/TSX composite index yesterday, mainly technology, biotechnology and thinly traded issues in the index's first major overhaul, while making three widely expected additions, including recently floated Shoppers Drug Mart Corp.

Shoppers, which has soared 40% since its November, 2001, debut on the Toronto Stock Exchange, was added to the index, along with Bema Gold Corp. and Ivanhoe Mining Ltd.

Thinly traded issues, including Chum Ltd. class B shares, Hollinger Inc. class C, E-L Financial Corp. and Fahnestock-Viner Holdings were among the list of firms removed from the index.

Telecom stocks made a strong showing on the deletion list, with bankruptcy-protected 360networks Inc. and financially troubled GT Group Telecom Inc. and Microcell Telecommunications Inc. pushed off the index.

Biotechnology stocks were also among the rejects, including Glyko Biomedical Ltd., Inflazyme Pharmaceuticals Ltd. and Micrologix Biotech Inc.

Tech stocks factored big into the changes, with 724 Solutions Inc., Zi Corp., Surefire Commerce Inc. and Certicom Corp. deleted. Lions Gate Entertainment Corp., WinPak Ltd., Acktion Corp., Proprietary Industries Inc. and Turbo Genset Inc. were also cut."

Posted by: OwenX

Quote:

Originally posted by TELUS
Like I said... AS OF JUNE 21... which is one week in the future Today is only June 14.

My source on this info is CTV Newsnet, so I think they're pretty reliable.

CTV Newsnet is a great source, but they can only report what they get from the newswire. The announcement talked about NASDAQ, delisting on June 21, and the TSX; you must have misunderstood it. Here is the actual announcement:

Company to Appeal Delisting Determination

As you can see, it clearly says:

Microcell's Class B non-voting shares will continue to be listed on the Toronto Stock Exchange (TSX) under the trading symbol "MTI.B".

If the TSX was going to delist Microcell on June21, they would have started the proceedings in April, and announced it last month. They didn't.

Listing requirements on the TSX are much more lax than on NASDAQ or NYSE. Many of the TSX stocks have a smaller market cap and trade well below Microcell's share price.

If you're still convinced about what you said, then let's meet here again on Friday, June 21st; one of us would have to admit their mistake and apologize.

--Owen

Posted by: OwenX

Dammit, Bacon! You beat me to it again....

--Owen

Posted by: Xirc

Fido's stock price has no bearing on the financial viabillity of the company unless the are planning on acquiring other companies or refinancing debt.

It can have a negative impact on employee moral and compensation packages though.

Posted by: OwenX

Quote:

Originally posted by Xirc
Fido's stock price has no bearing on the financial viabillity of the company unless the are planning on acquiring other companies or refinancing debt.

It can have a negative impact on employee moral and compensation packages though.

True, and hence it would indirectly increase the cost of retaining key employees. Good point.

Acquiring other companies? I think that has pretty much been ruled out for quite some time now.

As for refinancing, yes; it would make any secondary that much more difficult to issue. At this point, I think they're pretty much stuck with the debt market, or low-bottom convertibles, at best.

--Owen

Posted by: pcmonkeyhead

Let us face it, Fido has a very heavy debt load, and within 2 years it will run out of cash, if no new investment, either in the form of debt or equity, are coming in. Anyway, its low stock price is very attractive for somebody to take over the company, or simply wait for it to go bankrupt and buy it off the trustee's hand.

As a consumer, I would not worry. We still have a couple of years, and the new owner, if any, would have to give some incentive to keep old customers.

Posted by: theancient

Quote:

Originally posted by OwenX

TSX 300 is not an exchange, it's an index.

It's not even the TSX 300, because it doesn't necessarily have 300 stocks anymore. Now it's the "S&P/TSX Composite Index"
http://www.cbc.ca/stories/2002/06/13/TSX020613

Posted by: OwenX

Quote:

Originally posted by theancient

It's not even the TSX 300, because it doesn't necessarily have 300 stocks anymore. Now it's the "S&P/TSX Composite Index"
http://www.cbc.ca/stories/2002/06/13/TSX020613

That's right. I still cannot believe we let an American publisher pick our national stock index, but at least the index now makes more sense than it did in 2000, when 40% of the TSE-300 was Nortel...

--Owen

Posted by: Killa-b

now listen all, here is is the most important thing to consider. THE SOURCE (granted in this case its commonly known)

but i read this article in print and was flipping at the front cover, and low and behold who's the publisher?? ROGERS MEDIA muhahah talk about slander.

but alas fido is in the dump, its in that rock hard place where they need more customers, but need more coverage to get more customers. dang.

it really would not be all that hard, you can bet rogers is going to screw up somewhere. i really think fido should grab more business share, because they have much better features on their gsm network, not to mention great urban coverage.

Posted by: TELUSMobilityGuy

Alas I must have misunderstood it. June 21 has come and gone and so far Fido's only gone missing from Wall Street.

Although the news report on CTV Newsnet really sounded like it was being de-listed from TSX too... I was just as surprised to hear that as anyone else! Wish I'd seen the release you posted... much clearer than the TV reporter was.

Listing or no listing, I hope Fido makes some serious changes very soon, or else there won't be anyone posting any rewards for his safe return.

Apologies for my mistake.

Quote:

Originally posted by OwenX

CTV Newsnet is a great source, but they can only report what they get from the newswire. The announcement talked about NASDAQ, delisting on June 21, and the TSX; you must have misunderstood it.

If the TSX was going to delist Microcell on June21, they would have started the proceedings in April, and announced it last month. They didn't.

Listing requirements on the TSX are much more lax than on NASDAQ or NYSE. Many of the TSX stocks have a smaller market cap and trade well below Microcell's share price.

If you're still convinced about what you said, then let's meet here again on Friday, June 21st; one of us would have to admit their mistake and apologize.

--Owen

Posted by: OwenX

Quote:

Originally posted by TELUSMobilityGuy
Alas I must have misunderstood it. June 21 has come and gone and so far Fido's only gone missing from Wall Street.

Although the news report on CTV Newsnet really sounded like it was being de-listed from TSX too... I was just as surprised to hear that as anyone else! Wish I'd seen the release you posted... much clearer than the TV reporter was.

Listing or no listing, I hope Fido makes some serious changes very soon, or else there won't be anyone posting any rewards for his safe return.

Apologies for my mistake.

Think nothing of it, Sir. If I had a nickel for each time I heard an ambiguous business news item, or one which poorly worded, I wouldn't even need to invest any more...

Some business reporters are completely clueless about the topics they cover. One welcome exception is Paul Kangas, each night on PBS, for the past 30+ years. But of course, he started his career as a broker; most business reporters come straight out of journalism school. Useless...

--Owen

Posted by: Steve Punter

How can you believe any wireless stories on CTV? They are owned by Bell Canada (Bell Globemedia to be specific, I believe), in which case they have a conflict of interest when reporting anything that could impact upon the future of Bell Mobility.

Yes, the above is a very skeptical view of the media, but once the media is owned by corporate interests, I tend to believe they are no long unbiased.

Posted by: Xirc

Quote:

Originally posted by Steve Punter
How can you believe any wireless stories on CTV? They are owned by Bell Canada (Bell Globemedia to be specific, I believe), in which case they have a conflict of interest when reporting anything that could impact upon the future of Bell Mobility.

Yes, the above is a very skeptical view of the media, but once the media is owned by corporate interests, I tend to believe they are no long unbiased.

I like how msnbc handles this situation. Whenever they even so much as mention a company associated with NBC or Microsoft they specificially indicate in the article "Microsoft is a partner in MSNBC" or something to that effect. I think this at least gives the appearance of some added credability.

Posted by: OwenX

Quote:

Mr. Punter,

While I share your disdain for any corporate (or government) sponsored press, I find it hard to see how it would apply to this specific case. How likely is it that a Bell executive would instruct/encourage CTV to deliberately present a Microcell business news item in an unfavourable way?

I don't think Bell is above such behaviour; I just can't see them bothering to amplify an already fairly negative article. Have you witnessed any news-related cases where the Bell corporate "guiding hand" was evident? I don't know about CTV, but many news agencies are managed at arms-length, and editors allowed extensive reporting freedom.

It is not easy to find a news broadcaster or publisher who isn't tainted by some form of external influence; as a minimum, advertisers and sponsors are known to exert some force on almost any North American TV station. I usually try to get my news from more than one source, but other than in some extreme situations (e.g., government stations during wartime), I usually give the press the benefit of the doubt.

If that CTV report was poorly worded, I would tend to attribute it to incompetence, rather than malice, if only by virtue of the former's abundance...

--Owen

Posted by: Steve Punter

Actually, you are right that interference in UNLIKELY simply because it isn't worth it most of the time. However, I remain skeptical, especially in light of the recent news stories about Global's interference in the editorial policies of the newspapers it now owns.

Posted by: plasticparadox

I should make the point that Fido's Information Messaging service is now handled by Sympatico Wireless, which is operated by Bell Canada.