Gruetz,
>Martin, do you feel GX's adj rev and adj EBITDA guidance for this quarter, this year, and over the next five years (app 30% revs and 40% EBITDA)is conservative? It would seem to me that with GX's head start over competitors, growth over the next 12 mos. should be much higher. IYO, does TCM, FTHL, TSIX, and LVLT, or any of their potential acquirers, present a competitive threat to GX, not to overtake them but to render their financial targets less achievable?<
I recall Robert saying quite often that GX has always surprised the street with better than forecasted numbers, so it may be the company's management of expectations is on the conservative side. For Q1, the forecast range is $1.5 to $1.6 billion in cash revenue, and $430 to $450 million in adjusted EBITDA.
As far as competition to the others, I think GX is the leader in that over 60% of its fiber is undersea system... there is less competition in undersea system than terrestrial system. GX has a distinct advantage with its global undersea system, maintained by its wholely owned subsidiary Global Marine. Because GX is an owner as well as operator of the fiber network, it has full control and can tweak the network to meet customers specific needs. Also, its headstart in completing the fiber buildout allows it to practically market the systems now, while the competitors are still building them (especially TSIX).
Where GX has a distinct niche and leadership is in the financial services market. It is approximately a $104 billion market, and it operates the first IP-VPN network specifically for the financial services community, and has around 2,000 strategic accounts (see 10K), the latest one annouced this week being the Chicago Stock Exchange.
>How important is this one year lead that GX has on the competitors in terms of network completion? How does this make subsequent years more productive?<
From all that I've read, this lead appears to be very important. This year, GX is forecasting cash revenue of around $7.2 billion compared to LVLT of $2.5 billion. LVLT and TSIX have also announced reductions in workforce and realignments. Their scale backs could be attributed to the incomplete systems, credit tightening on telecom capexs, and their focus on terrestrial North American customers.
p.s. Bill, you're an expert in GX's systems leadership compared to others, so fill free to fill in the blanks, or elaborate more. |
