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Technology Stocks : Ascend Communications (ASND)
ASND 209.43-0.2%Dec 23 3:59 PM EST
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To: Gary Korn who wrote (34200)2/10/1998 1:15:00 PM
From: Dennis R. Duke   of 61433
 
Just a little thought:

From the Wall Street Journal, Tuesday Page A3, portions of an article about AOL:

"Since AOL announced flat-rate pricing in late 1996, the average time spent on-line each month by the company's members has climbed to 23 hours from seven (7) hours."

Now for those with a calculator that's an approximate increase of 228.6%. Doesn't that translate into a need for more infrastructure to handle those extended hours? Isn't the growth rate of subscribers masking the hours issue, which is the real equipment demand indicator?

AOL people went on to say:

Instead, they said, usage of the service has outstripped their expectations.

Better buy that ASND equipment soon. Seriously, if they are admitting that the demand exceeded expectation, wouldn't they know they need infrastructure?

Dan Schulman, the AT&T Corp. Vice President who heads the company's WorldNet Internet service, wouldn't discuss any pricing changes but was quick to add: "We've seen over the course of the last six months an exponential demand on our network."

I'll take "exponential" growth in ASND orders to cover infrastructure!

Finally, the article closes with an expert saying that pricing increase of 10% typically don't prompt defections and was quoted: "A $24 annual difference will not push them down below the poverty line."

It just my take, but I think orders to follow from the capital raised in the price increase is an appropriate conclusion.

Dennis
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