Printer Friendly

MTEL ANNOUNCES NEW STRATEGIC PLAN

 JACKSON, Miss., Jan. 5 /PRNewswire/ -- Mobile Telecommunication Technologies Corp. (NASDAQ: MTEL) told analysts today that it is implementing an aggressive, long-term strategic business plan for the Company and its SkyTel Corp. subsidiary which leads the nationwide wireless messaging industry in the United States. The plan is designed to capitalize on the well-known SkyTel brand name in order to take advantage of market opportunities in the United States, extend the Company's services into new international markets and continue to develop its innovative two-way wireless services by 1995.
 Among other things, the plan will reduce SkyTel pricing which will, in turn, reduce SkyTel's profits in 1994. However, SkyTel's profits are expected to rebound in 1995 and 1996 on higher volume.
 Citing the changing competitive market for nationwide messaging and price elasticity, the Company indicated that SkyTel will implement new pricing strategies designed to accelerate growth in its core business. The new monthly reference price for SkyTel numeric nationwide service will be reduced to $39 over the next several months. This service will continue to include at no extra charge SkyTel's most popular options such as the frequent calling plan, equipment rental, 24-hour centralized customer service, 800 service, customized billing and free message retrieval.
 "We believe that our new pricing strategy will increase demand for SkyTel's nationwide messaging services and provide greater value for our customers," said David W. Garrison, president of SkyTel. "This pricing strategy should also result in a significant increase in our subscriber base to whom we will continue to offer value-added services, and will provide the Company with increased profit opportunities over the long term."
 In the conference call with analysts, Mtel noted that the pricing strategy is expected to increase SkyTel's revenues by 20-25 percent in 1994 and by more than 45 percent in each of 1995 and 1996. At the same time, SkyTel's units in service are expected to grow in excess of 50 percent in each of the next three years. SkyTel's operating cash flow margins for 1994 are expected to be in the 20-25 percent range due to this pricing strategy, which is below previous estimates. However, these margins are expected to increase to 30-40 percent in 1995 and 1996 as a result of substantial volume increases, which will exceed current analyst estimates.
 SkyTel also announced plans to offer a bundled package of nationwide and local paging services to Fortune 500 companies in 1994 in order to further penetrate the national accounts market and to respond to customer requests for single-source solutions to their paging needs. SkyTel plans to offer local service through arrangements with its affiliates, its own system capabilities or other sources. Finally, SkyTel reported that it has recently renewed its reseller agreements with eight of its largest affiliates and is continuing discussions with other major affiliates. The new agreements provide for either multi-year agreements or the resale of SkyTel services on a preferred basis over other providers of nationwide services.
 Based on its recent success in Mexico and other countries, Mtel will continue to selectively invest in attractive nationwide messaging opportunities in countries on the SkyTel frequency. During 1994 Mtel expects to serve most of the major economies in Latin America, add a number of key markets in Asia and increase its presence in Europe. Mtel stated that profits from its Mexico and United Kingdom joint ventures will be offset in 1994 by start-up losses in other international markets, particularly its wholly owned businesses in Argentina and Colombia. Mtel expects its international units total to increase to 350,000 units in service by year-end 1994, with Mtel's share equaling approximately one-third of that level.
 Mtel stated that development of its two-way nationwide messaging business, Nationwide Wireless Network (NWN), is continuing successfully and that system construction will commence in 1994, with commercial launch still projected for mid-1995. The Company projects that start-up losses from NWN will begin in the second half of 1995.
 Mtel noted that overall for 1994, the effect of reduced SkyTel profits, together with the start-up losses that are anticipated from its international joint ventures, is expected to cause Mtel to incur losses from operations on a consolidated basis. In 1995, the Company expects to incur losses on a consolidated basis primarily as a result of the commercial launch of NWN. However, the Company believes that by 1996 the profits from SkyTel and its international joint ventures will more than offset the projected start-up losses associated with NWN.
 Separately, the Company announced for the quarter ended Dec. 31, 1993, Mtel had 254,800 SkyPager and 29,900 SkyTalk units in service in the United States and 61,500 international units in service. Mtel will announce further details on these figures this week.
 "We're confident that the new directions we are undertaking will maintain our leadership role in the wireless messaging industry, thereby maximizing revenues, cash flows, profits, and ultimately shareholder value," said J. Robert Fugate, chief financial officer of Mtel. "At SkyTel, we have chosen to take the current profitable niche business into a much higher plane of growth and value. With our international paging operations, we have the opportunity to do what no other single company is doing today -- capture a significant portion of the growth in paging services in a large number of countries, all networked into the same SkyTel frequency. And with NWN, we'll be early in the market with a technically advanced, low-cost, two-way network to address what many feel will be one of the premier sectors of the wireless services market."
 Mobile Telecommunication Technologies Corp., headquartered in Jackson, is engaged in business which include nationwide paging and voice messaging services in the United States provided through SkyTel Corp., the country's leading provider of nationwide wireless messaging services; international messaging services provided through Mtel International; and a proposed, advanced two-way Nationwide Wireless Network. Mtel had 346,200 units in service worldwide as of Dec. 31, 1993.
 -0- 1/5/94
 /CONTACT: David Allan of Burson-Marsteller, 212-614-5163/
 (MTEL)


CO: Mobile Telecommunication Technologies Corp.; SkyTel Corp. ST: Mississippi IN: TLS SU: ECO

JG-SP -- NY013 -- 9233 01/05/94 09:40 EST
COPYRIGHT 1994 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1994 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jan 5, 1994
Words:1013
Previous Article:COLONIAL CLOSED-END FUNDS ISSUE DISTRIBUTION DECLARATION
Next Article:TRESCA NAMED TO HEAD PRICE WATERHOUSE OFFICE IN KAZAKHSTAN
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters