Losses continue for Meteors parent firm


7 Nov 2002

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Mobile firm Meteor’s parent company Western Wireless International (WWI) has reported continuing losses in its third quarter results.

Overall Western Wireless reported a net loss of US$15.9m (€15.8m), while its WWI division, to which Meteor belongs, reported a loss of US$5.9m (€5.8m) among its seven consolidated businesses.

Domestically in Western Wireless’ home market of the US, the company reported a 10pc increase in revenues to US$93.7m (€93.4m) compared to the same period last year, with a 14pc increase in subscribers and a 48pc increase in minutes of use to some 250 million minutes.

For WWI’s seven businesses, including Meteor, revenues for the quarter increased 32pc over last year to US$87.3m (€87.02m), with the addition of 50,900 new mobile subscribers.

Brad Horwitz, the president of WWI, said he believed that the group’s strategy going forward is “being validated”.

He said: “Our strategy of operating in markets with low entry costs and favourable competitive dynamics, combined with our emphasis on operations has resulted in a valuable portfolio of properties.”

He added: “This is evidenced by our recent decision to sell our business in Iceland at a valuation that allowed us to earn a return of over three times our investment.”

This latter comment by Horwitz may re-ignite rumours that the company is considering selling off its Irish subsidiary, Meteor, with 3G licence holder Hutchison-Whampoa named as a potential bidder. However, Meteor has hotly denied that it is up for sale.

In recent months, former Meteor boss, David Sims stepped down and was replaced by Scotsman Stewart Sherriff, who has stated his intention to make the local operation profitable. Meteor’s entry to the Irish market was delayed by lengthy legal battles during 1999 and 2000, key market growth years for the local mobile sector.

As a result, the company has so far racked up only 118,000 subscribers, while arch rivals O2 and Vodafone control some 96pc of the Irish market. Nonetheless, Meteor has managed to grow its GSM network to cover over 83pc of the Irish population, and is banking on the introduction of number portability after Christmas, which will allow subscribers to carry 085/086/087 prefixes with them whenever they change networks to allow the company to chip away at O2 and Vodafone’s market share.

While the financial aspect of Meteor’s investment in its network in Ireland is unknown, according to a Securities and Exchange Commission filing by Western Wireless from last April, Meteor entered into a bridge loan facility to provide funding for the network in Ireland. The aggregate amount available under the loan at its inception was approximately €37m, which increased quarterly to reach €75m in January, 2002.

By John Kennedy