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Technology Stocks : Global Crossing - GX (formerly GBLX)
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To: Frank A. Coluccio who wrote (1736)9/6/1999 9:44:00 PM
From: Teddy  Read Replies (2) of 15615
 
Frank, i was looking at your math on the Exodus purchase of capacity from Global Crossing:
Message 11171165
and i agree that the wording in the PR is very confusing. Maybe Exodus has the same PR writer as GBLX. <insert smile here>

I would like to leave off the what they are calling 5.1 Gb/s and what I come up with as 2 Gb/s discussion and look at the price.

I thought one Gb/s equals 6.4 STM-1's.
If that be true, than the stated 5.1 Gb/s would equal 32.64 STM-1's, right?
If we divide the $105 million by 32.64 we get $3,216,911.76 per STM-1.
I would expect some discount on a $105 mill purchase (and we think Exodus is a repeat customer too). The think i can't figure out is, why is the average price 3 times the price Barron's said?
...Jefferies & Co. analyst
Gregory P. Miller... writes that a transatlantic STM-1 line's
cost has slipped from $12 million in early '98 to about $1 million today.

Cable resales announced this year by Pacific Gateway suggest that the
slippage continues. In April, the firm announced the sale of 17 STM-1 lines to
Williams Communications for $30 million, about $1.8 million each. Last
month, Pacific Gateway disclosed the sale of another 5% of its Atlantic fiber
-- which would be about 25 STM-1 lines -- for $35 million, suggesting that
prices have fallen below $1.4 million per line, or 22% in three months...

The only possible explanations that i can think of for this huge discrepancy is:
1: Barron's was way wrong.
2: Pacific Gateway is not too bright.
3: Exodus got ripped off big time.
4: Global Crossing has some fast talking sales people.

Frank, can you give us an idea on the real going prices for trans Atlantic and Pacific circuits?

thanks,
Teddy
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