BancAmerica Robertson Stephens Publishes Wireless Services Research

May 21, 1998, 01:00 ET from BancAmerica Robertson Stephens

    SAN FRANCISCO, May 21 /PRNewswire/ -- BancAmerica Robertson Stephens
 research analyst Steven R. Yanis has published his sixth annual "Wireless
 World" report which includes an extensive report on the mobile telephone
 industry as well as individual company reports on AirTouch Communications,
 Omnipoint Corporation, Western Wireless Corporation, Nextel Communications,
 Vanguard Cellular, Telephone and Data Systems, United States Cellular, Aerial
 Communications, Centennial Cellular and 360 Degrees Communications.
     In "Wireless World," Yanis, who covers the wireless communications
 services industry, reports that for the first time in more than two years,
 wireless service stocks have significantly outperformed the broad equity
 market.  Since mid-1997, Yanis' universe is up 65% versus 24% for the S&P 500.
 Yanis believes there are several reasons for the recent strength of wireless
     * Signs of profitable coexistence: PCS (Personal Communications System)
 companies have posted impressive subscriber gains (0.8% average penetration
 gain) and healthy monthly bills ($60 on average).  At the same time, cellular
 subscriber gains have slowed somewhat (Net subscriber additions were down 16%
 on average with the overall subscriber base growing 19% in 1997), but cash
 flow margins have increased.  All of this activity has resulted in a peaceful
 coexistence between the PCS and cellular phone companies.
     * Significant merger, acquisition and buyout activity at healthy
     * Delay of the C-Band buildout:  The 30 MHz C-Band licensing process has
 been tied up by bankruptcies and rule changes and has kept an additional
 competitor (potentially a dangerous competitor) at bay
     * Wireless stocks are interest rate sensitive and most companies have
 little to no exposure to Asia.
     Overall, wireless subscriber growth showed a healthy 4% incremental
 penetration gain for 1997, in line with Yanis' estimates from last year.
     In general, wireless services equity valuations are closer to Yanis'
 target valuations than they have been in more than two years.  Cellular stocks
 currently trade on average at 9.7 times and 8.3 times his 1998 and 1999 cash
 flow estimates and PCS stocks trade at $35 per pop (license value).
     Although Yanis believes much of his universe offers only modest upside
 growth today, he continues to favor some key stocks.  "We believe there are
 some stocks that are still attractive and there are some macro industry events
 that could raise valuations across the board," said Yanis.  Yanis is referring
 two positive industry events on the horizon: calling party pays (CPP) and
 widespread pre-pay service offerings.  Calling party pay systems are prevalent
 throughout Europe and are widely believed to lead to greater wireless minutes
 of use and potentially greater penetration levels.  "We believe effectively
 deployed and effectively managed, pre-pay plans could accelerate penetration
 gains into broader markets such as college students," said Yanis.
     In the meantime, Yanis believes M&A activity, PCS growth, cellular LBO's
 and strong international results will continue.  Yanis' four favorite
 companies are Omnipoint (OMPT), AirTouch (ATI), Vanguard Cellular (VCELA) and
 Western Wireless (WWCA).  Yanis likes Omnipoint given his expectations of
 rapid subscriber growth, potential for a powerful strategic partner from
 abroad and its unique position to benefit from C-band restructuring.  As for
 AirTouch, although not inexpensive, he is intrigued by the strength of its
 international operations coupled with the potential for a mega merger.  While
 Vanguard Cellular has had some disappointing operational and financial
 reporting results, Yanis hopes that the company may continue enhancing its
 shareholder value theme.  Lastly, is Western Wireless.  "We are still firm
 believers in the 'allure of rural cellular' and Western Wireless offers one of
 the few remaining ways to invest in that attractive segment of the market,"
 said Yanis.
     Within the industry section of Yanis' "Wireless World", there is an
 extensive report that covers an Investment Overview, a Review of Industry
 Fundamentals, Domestic Wireless Industry Projections, Pricing, C-band License
 Update, Wireless Launches, AT&T and Sprint PCS Update, AT&T Wireless:
 Condominiums for Sale, Pre-Pay Takes the Wireless Industry by Surprise,
 Calling Party Pays: Where It Stands Today, Our Model for an Average Cellular
 Operator, and NPV and Breakeven on a Wireless Subscriber.
     Steven Yanis, a managing director and head of Telecommunications Services
 Research, joined BancAmerica Robertson Stephens in 1997.  His coverage focuses
 on the wireless communications services industry.  Recently, Yanis was ranked
 #1 Wireless Services analyst in the 1997 Institutional Investor Poll
 (All-American Research Team) and the #1 Wireless Services analyst in the
 1997 Greenwich Associates Institutional survey.  Yanis graduated Magna Cum
 Laude with a Bachelor of Science degree in economics from the Wharton school
 of the University of Pennsylvania and holds an MBA degree in finance from New
 York University.
     If you are credentialed media or clients of the firm, and would like a
 copy of Yanis' research "Wireless World" or "The Mobile Telephone Industry,"
 call Amanda Watson at 415-676-2995 or Steve Yanis at 212-319-8900.

SOURCE BancAmerica Robertson Stephens