Dobson Considers Sale, Too
My Views ..
I think this is a very this company perhaps to be bought out because it relies heavily on roaming revenues primarily from Cingular or the new AT&T, which stands at 89% of DCEL’s roaming traffic which was up 9% year over year. DCEL also has an alliance with T-mobile. Through the current valuation, that Alltel was bought out for $27.5 billion for 12 million subscribers, which is about $2291 per subscriber. DCEL has 1.7 million subscribers using that multiple of $2291 per subscriber values the company at $3.895 billion. I think it will be difficult for them to grow in the future, as there are stronger players in this industry who are stronger than DCEL such as the major carriers. The good thing, however, DCEL serves in the rural areas where th...
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1. Cingular. The problem comes into play is that there is a roaming deal in effect so why would they want to spend $3.85 b for DCEL.
How much does AT&T pay Dobson NOW per minute in roaming charges? If over the next 5 to 10 years Dobson would make than $3.85 b, AT&T would be making a hell of a deal now than to keep sending checks to Dobson over so many years.
How much does AT&T pay Dobson NOW per minute in roaming charges? If over the next 5 to 10 years Dobson would make than $3.85 b, AT&T would be making a hell of a deal now than to keep sending checks to Dobson over so many years.
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At the end of March 31 2007 (1st quarter), DCEL recorded roaming revenue of $61.9 million. (This is because of both Cingular and T-mobile) Therefore, that is about $247.6 million for the year. (61.9 times 4.) If we were to say that in 5 to 10 years. 5 years would be $1.2B and 10 years would be $2.476B in roaming revenue recorded. They would not make this money, it would be as revenue. Remember, they still have a loss. Will that be in the future? Who knows? (Of course that figure that I have for the 1 year, 5 years and 10 years, are not including any growth.) Roaming revenue, however, does decrease over time.
According to the 10q, it mentions this; “Our roaming yield (roaming revenue, which includes airtime, toll charges and surcharges,...
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According to the 10q, it mentions this; “Our roaming yield (roaming revenue, which includes airtime, toll charges and surcharges,...
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It helps a lot. I figured roaming rates were higher than that. I was thinking more like 5 years ago when more consumers paid roaming charges and were paying like $1.29 a minute. So current roaming agreements are $0.09 a minute? Then you're right if AT&T decided to purchase, not a good move. Keep the roaming agreement. (Hope I read that correctly.)
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Yea. If this was a few years ago when roaming rates were a lot higher than perhaps it would be better, but it is so low that buying a company like this wouldn’t be in their best interest. Of course, there will be synergies when they combine. I do not think there is any reason why they, AT&T, will buy out DCELL especially with the current roaming deal in place. T-mobile probably could use them but again they have a roaming deal in place with DCEL too.
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For $5.1B which includes debt. Ahh the most important that was noted had to deal with $2.5B in synergies that they could realize from the deal. Obviously, I mentioned that I did not think it would be a good idea for AT&T to buy out DCEL and I was wrong on that opinion but I also did state that there must be synergies in place from the deal to make it more attractive. Because of the realization of $2.5B in synergies they will obtain from the combination it will be better.
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The reason for why I was not so optimistic that I did not think high synergies would be obtained but obviously $2.5B is a pretty good number. The problem, however, has to deal with now they will not have to pay those roaming rates but they were so cheap that it would be a few years before they would even cough up $2.5B to DCEL. (The math was done in this forum talking to another member.) I do as if AT&T because they are a great company, but I just felt this deal was not the best interest for the company or the shareholders involved. I think DCEL obviously needed to be bought out because of their struggles but with that great deal they had with AT&T regarding the roaming agreements, as soon as the buyout was announced it puzzled me.
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