Tim, My notes from the call are poor, but did get the feeling that things were going better than I expected. TCI is a strong customer if you believe Tony Ley. He's expecting to take the biggest share of their DWDM upgrades.
I counted 7 people on the call:
SG Cowen, Blaine Carrol
Raymond Dean, Todd Kaufman
Warburg Dillon Reid, Nikos (something)
Gipco, George Gipen (?)
Soundview, Kevin Slocum
John McStay, Wayne Willems
CIBC Oppenhiemer
I seemed clear that New Media was not integrating as well as they had expected. They were hoping to see a synergy develop around their software that is PC based which could have been converted into a card that would go into a transcend unit. This has not happened.
New Media has only a little over 20 people. I recently talked to their North America, or even Americas rep in San Diego. Sure seemed like he had more on his plate than one can handle. As I posted earlier, PCTV has sign up Hybrid for some MMDS equipment. At the time I spoke with him, he wasn't aware of PCTV and their efforts with SpeedChoice. This is no slam on him, it's just amazing that such a small company can find the resource to address the market.
They said this PTT in China was setting aggressive plans which they couldn't complete on schedule. They slipped shipping this quarter and could have made a break even or perhaps profit without this pushout. Ley sounds like he blames his customers for not being smart enough, quick enough and what ever not to get things going faster.
I never have any doubt that Tony Ley is technically very competent, but I wonder he's the best marketing visionary? New Media for example, has to make a lot of press releases if they want to get known and have the world come to them.
I seemed to feel that there was some small question for this China sale as far as credit risk. Did you get that? This customer is now 10% of revenues.
Can see a profitable quarter coming, but unsure of the next quarter due to typical winter slowdowns. They swapped out and upgraded TCI in Dallas with DWDM in 3 days. Maybe these types of upgrades can continue through the winter?
Regards,
Mark
PS CNBC just interviewed Winstar CEO who claimed tha 7400 buildings in the US have no broadband access. They rely on twisted pair copper for their communications gateway. This is a great opportunity for wireless broadband access. To win these contracts, New Media will have to have a strong marketing plan to get the word out, but the market is very real. |
