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Technology Stocks : PAIR-NEWS ONLY!!!!!
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To: Sector Investor who wrote (1)9/15/1997 3:37:00 PM
From: Sector Investor   of 73
 
ASND--US West Drops IDSL and Ascend
10:16am EDT 15-Sep-97 Salomon Brothers (Peter Swartz (212) 783-6589) ASND

ASND--US West Drops IDSL and Ascend
Rec. Code: HOLD
Current EPS: 1998E: $1.60 1997E: $1.22 1996A: $1.02
Current Price: $35.25
09/15/97

Investment Conclusion:
According to Greg Gum, executive director of US West !nterprise's megabit
services division, US West !nterprise has dropped plans to install Ascend's
IDSL (Integrated Digital Services Network DSL) equipment. Instead of using
Ascend to provide IDSL and HDSL equipment, US West has decided to support only
single-line HDSL (SHDSL), which operates at speeds of 64 Kbps to 768 Kbps, and
implement equipment from Cisco and PairGain. US West indicated that the
rationale for dropping IDSL support was (1) a lack of customer interest in
IDSL; (2) a lack of available IDSL equipment; and (3) the excessive costs
associated with managing two xDSL networks. We view US West's about face as a
surprising development for Ascend. US West was one of the early adopters of
the IDSL technology and has been an Ascend reference account from early on.
While we expect a positive announcement on IDSL imminently, we
believe US West's about face could slow other RBOC testing and deployment
during the next 6 to 12 months. Given the expectations for IDSL adoption, we
view US West's actions as disappointing for Ascend. We maintain our Hold
rating on the shares.
RE226P
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