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Bulging Debt May Spell Trouble for Energy, Telecom and Retail
13 april 2018
by Norm Alster
Enkele delen, die op de Telecom industrie betrekking hebben, uit bovenstaand artikel:
Telecom debt also is worth watching. Citing increased price competition, Moody’s has a negative outlook on the entire sector. Bill Wolfe, Moody’s senior vice president, said the industry was rife with “large companies with a lot of debt,” including Frontier Communications, CenturyLink and Sprint.
Verizon Communications also carries a large debt load, but it may be something of a special case. “They’re an extremely large issuer,” Mr. Wildstein said.
One important positive for Verizon, Mr. Wolfe said, is that it has “the premier wireless network.” But the cost of upgrading that network may also be a Verizon vulnerability. The company is moving aggressively to put in place 5G technology, which uses higher frequencies to speed wireless transmission. But 5G is expensive to install, and it faces widespread opposition in many municipalities and from some scientists, who say it entails health risks.
Mr. Wildstein’s fund holds Verizon debt, and he says the company may be overly dependent on its wireless network. It needs to diversify by acquiring a cable provider or media company, he said.
Robert Persons, a manager of the MFS Corporate Bond fund, is also concerned about Verizon’s 5G expenditures. “We are monitoring that closely,” he said. With uncertainty and controversy overhanging the 5G rollout, he wonders: “Will it be worth the capital investment?”
Verizon lists its total debt as $117.1 billion. “We want to strengthen the balance sheet,” Matthew D. Ellis, the company’s chief financial officer, said on a Jan. 23 earnings call. “You should expect us to deleverage from where we are today,” he added.
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