Abreis, Re: IWA’s 2008 Q1 CC of May 1, 2008
Upon reviewing the CC, I did not find anything exciting or distressing...
IWA’s revenue and earnings were slightly down from the previous year. They are losing access lines, but growing DSL and CPE (Customer Premise voice and data Equipment) business. The loss of access lines and growth of DSL in part reflects customer conversion from dial-up to high-speed modem internet access, a good thing for IWA in the long run.
Basically, I view IWA’s market as mature and do not see substantial growth in the near future. However, their 9-10% dividend remains covered and is safe, so I continue to see this as a good high yield stock.
The only thing new that I saw of interest in the CC was that IWA obtained three of the FCC’s recently auctioned 700 MHz spectra. Combined with the AWS spectrum acquired last year, IWA now has spectrum which covers approximately 84% of their access lines. They claim to have no immediate plans to deploy this spectrum. If and when they do, they may need to reduce the dividend to meet the capital investment requirements. In any event, this spectrum is not available to competitors, a good thing in my estimation.
