I posted this last night but it seems to have gone away this morning. OK, this is sort of some backwoods analysis of the situation. I used a number of different sources, but did not spring for some of the $300 to
$400 for some of the detailed reports I would have like to.
BellSouth, from their year end financials and quarterly reports located at www.sec.gov:
BellSouth is one of the largest wireless communications providers in the United States,
with operations primarily in its wireless service territory. BellSouth has cellular and PCS operations in 14 states, encompassing approximately
78 million total POPs, 58 million on a proportionate ownership basis. This extensive wireless footprint includes some of the top wireless
markets in the country including Los Angeles, Houston, Miami-Fort Lauderdale, Atlanta and Tampa-St. Petersburg. BellSouth ended 1998 with
approximately 4.8 million cellular and PCS customers on a proportionate basis. BellSouth's penetration rate at December 31, 1998 was 8.2%
of the POPs in its domestic markets.
Analysis: BellSouth's wireless business seems to be growing by some 15-20% per year in revenue, though they have a declining revenue per
phone. Hence, there customers are growing more rapidly then 15-20%. If we use the 20% figure, we would estimate that their current cell phone
users might be around 5.2 million. From several sources
(http://www.phillips-infotech.com/pcs_home.htm
bdaniels.com, we can estimate that perhaps 12%, or 642 thousand of those may be PCS. BellSouth has a web
pate at
bellsouthwd.com. They are actively promoting NETDs products with the only animated banner on the page. Note also that they are
advertising ALL of NETDs products, not just the latest inexpensive service. Let's just say that we get 10% of these customers, on a service
averaging $5. That would be $321,000 per month in revenue,
or 3,852,000 per year.
See BellSouth links at:
bellsouthwd.com
bellsouthwd.com
bellsouthwd.com
bellsouthwd.com
Now for Skytel, from their 1st quarter 1999 financials located at www.sec.gov.
As of March 31, 1999, the Company had 993,500 one-way messaging units in service in the United States, which included approximately
58,500 prepaid paging units, as compared to 939,700 one-way messaging units in service as of March 31, 1998, of which approximately
13,400 were prepaid paging units. SkyTel also had 450,600 advanced messaging units in service as of March 31, 1999, an increase of
100.4% over the 224,900 advanced messaging units in service as of March 31, 1998.
Approximately 9,300 of net unit additions placed in service on the Advanced Messaging Network in the first quarter of 1999 represented
conversions of units from one-way to advanced messaging services, as compared to approximately 12,400 of
net unit additions on the Advanced Messaging Network in the first quarter of 1998.
It is my understanding that one-way pagers include both numeric and alphanumeric, and that NETD needs at least the alphanumeric. All of the
advanced pagers should be able to handle the service. This is where I lose one of my references, but I believe I have seen that about 25% of
one-way pagers are wireless. That would mean that Skytel has (224,900 advanced + 248,375 one way) 473,275 pagers capable of using
NETDs services. While I believe that some prior quarterly income was due to Skytel, the addition of a low-cost service such as in their last
announcement should bring in a
lot of volume.
And this is where Office Depot comes in. Not only is Skytel offering NETDs services through their traditional markets. Now, Office Depot
personnel will be specifically trained to sell their products. While most of the platforms that NETD will be sold on in Office Depot stores will be
Skytel, I presume they will also make the service available for other pagers. However, if we can again presume a 10% penetration at $5
average
service, that would mean an additional 236,637 in revenue per month, or an additional 2,839,650 per year.
Between sales from the BellSouth deal, Office Depot and Skytel, revenues from these coperations might be around 6,691,650. This alone
would increase their revenues by over 500 %, I believe.
Now this increase would not include revenues from their enterprise products such as the auction software and other internet technology, which
may be substantial. It does also not take into account any future deals like the Office Depot and BellSouth news, which we have already been
told is coming, or any other growth outside of those
specific distribution channels examined above. They were already selling pagers prior to all these new partnerships, and since this industry is
growing, they would probably have grown somewhat without these announcements. You could make an easy argument that their revenues could
soar to 700-800%.
Since they do not have estimates out at the analysts, we might make a game of guessing the growth. Keep in mind that I make every discliamer
available at the bottom of this page:-) I just own stock, wasn't given any stock, am not a broker or a professional trader, and have no inside
information. Some of my estimates may be
incorrect, but I invite anyone who wishes to refine this to do so.
Some additional good research links are at:
wow-com.com
wirelessweek.com
phillips-infotech.com
bdaniels.com |
