S&P says Ubiquitel unchanged

Standard & Poor's said UbiquiTel Inc.'s ratings including its corporate credit at CCC with a developing outlook is unchanged in response to its second quarter earnings.

Although improving, EBITDA is minimal compared to overall debt leverage, and churn is still high at 2.9%, S&P noted. Annualized EBITDA to total debt was about 19 times and S&P said it does not expect this metric to decline to the 6x area until at least 2005.

Liquidity is limited given the company's negative free cash flow position (excluding the $8.1 million federal income tax refund recorded in the second quarter 2003) and the need to amend bank covenants by the fourth quarter of 2003 or in 2004.

On the positive side, revenues in the second quarter exhibited a 13% increase from the first quarter of 2003, attributable to increased subscribers, higher average revenue per unit ($58), increased demand for PCS Vision and slightly higher roaming revenues, S&P said. In addition, the recent wholesale agreement signed between Qwest Communications International Inc. and Sprint PCS, together with anticipated expansion in the distribution channels, should provide a moderate incremental revenue opportunity for UbiquiTel. The recently revised management agreement with Sprint PCS, which eliminates the build-out requirements for the Montana properties, reduces near-term capital requirements.

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