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Technology Stocks : Global Crossing - GX (formerly GBLX)
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To: cfoe who wrote (11248)5/17/2001 9:36:42 PM
From: Theophile  Read Replies (2) of 15615
 
cfoe, I am only now catching up on the thread. Your question about the IRU sales is not nearly so involved as the leasing sales....the IRU is an investment by a purchaser, and the services to light it up may or may not come to GX. These contracts are extremely convoluted to my inexperienced eye, but of concern here are a couple of issues:
1. the IRS declared the IRUs needed to be amortized over their expected life (corrections, please)
2. capacity sales are somehow geared to year to year pricing drops, in that a price will be fixed for the contract, and adjusted yearly according to Band-X type of trader's averages (for bandwidth)
3. servicing that IRU may be cheaper for GX than for the purchaser
4. selling capacity I believe is the most coarse offering, and selling point to point connectivity, including all handoff charges, provisioned services, etc, is what will bring in the bucks for GX.

Does that address your questions? Maybe somebody else can be more informative.

MartinT
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