Sprint To Sell PCS Stock

Sprint said Thursday it will go ahead with plans to sell $500 million worth of stock in its fast-growing wireless PCS unit, though no timetable was given.

The money will be used to expand Sprint's wireless service, whose number of new customers more than doubled to 830,000 in the fourth quarter from the previous quarter, the company said. For the year, Sprint PCS added 1.7 million customers and now has more than 2.58 million.

PCS, short for personal communications services, is a digital wireless technology that's more efficient and provides a clearer signal compared to cellular. Its phones are also smaller and lighter.

Sprint (FON) had planned an initial public offering for its PCS unit in 1998, but ruled out such a move last fall amid a broad downturn in the stock market. It later decided to create a separate tracking stock instead.

Yet, with the market fully recovered from its fall swoon, the company believes it would get a better price for its shares.

Shares fell 7/16 to 79 15/16 Thursday.

Despite its fast growth, the PCS unit has been losing hoards of money amid efforts to flesh out its national network and attract new subscribers by lowering prices.

In the fourth quarter, Sprint spent nearly $700 million building its network, which now encompasses more than half the U.S. population.

In the latest quarter, Sprint said revenue should range from $430 million to $450 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) - a key indicator of health in fast-growing high-tech sectors - is expected to be a negative $590 million to negative $610 million, compared with a loss of about $350 million in the third quarter.

Sprint said it will issue fourth-quarter results for the parent company and its PCS unit on Feb 2.

Written By Jeffry Bartash, CBS MarketWatch