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Dobson gains in debut

Rural and suburban cellular telephone services provider Dobson Communications (Nasdaq: DCEL) hopped up 2 5/8 to 24 5/8 after it priced its 25 million shares at $22, the top of its $20-22 range, in Friday's largest offering.

Lehman Brothers is the lead underwriter for the offering, and Salomon Smith Barney and Banc of America are acting as co-managers.

The company's services cover a total population of about 5.9 million and, as of September 30, it had an aggregate market penetration of about 7.2 percent. Dobson's services cover portions of Arizona, California, Kansas, Maryland, Missouri, New York, Ohio, Oklahoma, Pennsylvania, Texas and West Virginia.

For the nine months ended September 30, the company had net loss of $88.9 million on revenue of $235 million, compared to a loss of $30.9 million on revenue of $96 million for the same period in 1998.

The company gets a large portion of its revenue through AT&T Wireless, which is also a business partner. Roaming revenue accounted for about 46 percent of the company's total revenues for the nine months ended September 30, and AT&T Wireless's customers customers accounted for about 37 percent of its roaming revenue, or 17 percent of total revenue, the company said. Dobson has a deal with AT&T Wireless whereby each will own a 50 percent interest in the joint venture that will own American Cellular, the company also said in its SEC filings.

Dobson competes with Frontier Cellular, GTE Wireless (NYSE: GTE), AT&T Wireless (NYSE: T), Nextel Communications (Nasdaq: NXTL) and Sprint PCS (NYSE: PCS). Bell Atlantic Mobile Systems, (NYSE: BEL), VoiceStream Wireless (Nasdaq: VSTR) and Vodafone AirTouch (NYSE: VOD) could also operate a competing nationwide wireless system through joint ventures and affiliation arrangements, the company said.