Hello Chungkai,
A little data for your pleasure:
<<Do you have reasons to be sure the trend of 4:1 will continue?>>
Nope. MSN will get a share, and so will the other players. I do
expect the total market to grow, as per my earlier post.
<<How many subscribers will switch to Unlimited Plan you think?>>
Not my estimate, but that of AOL Management, is that 50% of users
will opt for unlimited. Balance will be a mix of the $4.95 + hourly
charge deal, the $9.95 + deal, and the use your own ISP plus AOL
flat rate at $9.95 unlimited deal.
<<If all subscribers of AOL switched to Unlimited Plan, how much
could AOL make you calculate?>>
6.85 million current subscribers x 12 months x $19.95 per month, plus
revenues not associated with subscriber access charges, like
advertising and online purchases and the corporate intranet business.
Here are some management forecasts, as I understand them:
(in millions of $)
6/30/95 6/30/96 6/30/97 6/30/98
Online services revenues: $344 991 1,500 2,000
Other revenues 50 102 200 500
Total revenues 394 1,093 1,700 2,500
Note rapid increase in other revenues item.
Average monthly services revenue per subscriber had been rising from
$14.50 in 1994 to $16.28 in fiscal 1995, to $17.96 in fiscal 1996.
Management estimates this will now fall back to $17.00 per month in
fiscal 1997 as a result of the unlimited pricing option.
Other revenues per subscriber is now in the $2.00 per month area, but
will rise to $4.00 per month if the $500 million figure above is
attained with 10 million+ subscribers.
But what about the bottom line, you may be wondering? What about cash
flow?
Estimated EPS for fye 6/30/97 is breakeven, and for fye 6/30/98 is
$.80 to $.90
Cash flow for the 6 months ended 6/30/97 is expected to be positive
$70 million. This is including all marketing and network buildout
expenditures. This does NOT include any extra cash flow from members
opting for the prepaid option of paying one or two years in advance
to get the discounted subscriber rates. Management estimates 3% will
elect to prepay, and this would add another $100 million.
Total expected positive cash flow for balance of this fiscal year =
$170 million. Net. Add that to cash and investment balances of $128
million at 6/30/96. The liquidity crunch is a myth, IMO.
I would appreciate any and all *intelligent, non-abusive* responses...
Good luck to [most] all,
Brian |
