McCaw Cellular Communications Inc, which reported a second quarter net loss of $60.7m – down from $87.5m last time, and saw turnover soar 101.8% at $242.4m may look as if it is comfortably building up cellular traffic to service its debt, but its interest repayments on over $4,000m of debt now stand at $390m a year, which could prove hard to service at a time when cellular phones are likely to be increasingly treated as a foregoable luxury – and those with phones may use them more sparingly to reduce what are seen by some as exorbitant charges: the Wall Street Journal notes that the company’s 12.95% bonds due 1999 are now trading at 80 cents on the dollar to generate a spicy 17.4% yield – which means that many people do not believe McCaw will be able to keep up interest payments, all of which leaves British Telecommunications Plc’s $1,500m for a 20% stake in the company looking a bit sick – at the current $17.75 share price, its value is halved.
