I can't understand the high valuation being assigned to NTRO
while the DMIC stock price stands still. After sitting in the
$40-50 range during Jan & Feb, NTRO rocketed to $118/sh in early
Mar before settling into the $80-90 range. At least one early
investor has bailed out of NTRO with a huge capital gain:
Sunday March 12, 4:43 am Eastern Time
Mofet sees pretax $48.3 mln gain from Netro shares
JERUSALEM, March 12 (Reuters) - Israeli venture capital
fund Mofet sold its entire holding in Netro Corp (NasdaqNM:NTRO
- news) and expects a $48.3 million capital gain before taxes,
Mofet said in a statement on Sunday.
The gain will be included in Mofet's first quarter results,
the statement said. Mofet purchased the shares in Netro in 1995
for $633,000.
Netro makes equipment for high-speed wireless telecommunications access.
Mofet stocks surged 15 percent to 6.50 shekels early on
Sunday.
($1 = 3.97)
The fact is, companies like NTRO, PCMS, ADAP, and others are
getting big bets from the market based on their PMP technology.
But the customers for this technology (e.g., WCII and TGNT)
haven't yet decided which supplier has a "good enough" product
to allow them to execute their business plan. In short, the
trials haven't gone so well and it would seem that the suppliers
who got to market early may have been *too* early in that
their PMP products aren't as good as their customers had hoped.
DMIC has been criticized for "missing the boat" by not coming
out with a PMP product yet... but I don't think it would have
made sense for them to come out with inadequate products that
leave their customers complaining (as their competitors have).
Instead, DMIC has come out with the premier high capacity PTP
product (their 155 Mbps Altium radio) and they're developing
a still higher speed product (622 Mbps) which will come in
both PTP and PMP flavors (now THAT is what I call broadband).
In the interim, DMIC has partnered with privately held Ensemble
Communications so DMIC can offer Ensemble's PMP product. It had
been thought that Ensemble would be coming late to the party,
but it seems that the extra features Ensemble has built-in
may turn out to be a real competitive advantage. Even if
companies like NTRO and PCMS can come out with their next
generation PMP products a lot earlier than expected, it seems
to me that Ensemble (and DMIC) can still take a sizable chunk
of the market... and its a huge market, expected to grow to
more than $5 billion in 2003.
=============================================================
Broadband Wireless Gets To The (Multi)Point
By Fred Dawson Contributing Editor, Inter@ctive Week
March 13, 2000 7:49 AM ET
Vendor assertions that this is the year when wireless broadband
technology will finally take off will soon be put to the test.
The lead guinea pig will be Teligent, which has a plan to ramp
up wide-scale deployment of point-to-multipoint access systems
starting this spring.
"Right now, that's the plan, but we won't know for sure until things
get rolling," says Steve White, vice president of sales at the company's
operations in Louisiana and Texas. "There's still a lot of testing
going on in the vendor selection process."
Teligent, which now has high-speed wireless access operations in
place in 40 major U.S. markets, is currently using point-to-multipoint
transmitters on a limited basis in many of those areas, including White's
territories. But until now, Teligent has relied on the more mature and
technologically simpler point-to-point wireless technology, along with
some wireline Digital Subscriber Line connections, to serve its small
and midsized business customers.
With only 4 percent of roughly 760,000 office buildings nationwide now
directly connected to fiber-optic networks, the opportunity for delivering
broadband access via wireless networks remains huge, White says. "We see
revenue from fixed wireless services going from $0.3 billion [$300 million]
in 1999 to more than $5 billion in 2003," he says.
[snip]
Full article (long):
zdnet.com
Excerpt pertaining to Ensemble Communications:
The fact that U.S. players across the broadband wireless spectrum, from LMDS
to MMDS to the 39-GHz tier, have yet to announce suppliers for commercial
rollouts of point-to-multipoint systems has fueled a new wave of technology
offerings from established and start-up vendors. "The air links available up
until now have not been sufficiently flexible to support the pricing and usage
models that you need to compete in the real world," says Carlton O'Neal, vice
president of marketing at Ensemble Communications.
Ensemble had originally expected to be playing catch-up with its Adaptix air
link protocol, which is slated for release this spring. But the failure of
the market in general to take off has greatly improved the company's prospects,
O'Neal says. "It's not a great situation for the carriers, but it's great for
us," he notes.
Along with providing the mechanisms for dynamically assigning bandwidth at
predetermined pricing levels, the Ensemble system can handle bursting large
quantities of data on top of the guaranteed service a given customer has signed
up for, O'Neal explains. Because such bursts can be accommodated via unused
portions of a specified channel stream at any given moment, this means that
operators can assure customers they'll have added bandwidth available when
they need it, while maximizing the number of customers served by any one
channel.
Other Adaptix features include the use of adaptive time division duplexing,
which allows variable rates of data to flow in both directions over a single
channel; adaptive TDMA, which supports variable packet lengths to maximize
bandwidth efficiency; and adaptive modulation, which provides for the delivery
of signals over the highest level of modulation that's feasible at a given
moment in the fluctuating atmospheric environment of the transmission path.
While O'Neal says Ensemble's system will register at about a 6 on a scale
of 1 to 10 in the pricing of wireless broadband systems, he contends that
the overall cost of infrastructure based on its technology will be much lower
because of the flexibility the company has built into its technology. The
system, which includes 64 Quadrature Amplitude Modulation (QAM) as one of
the dynamically assignable modulation options, operates over any frequency
tier, from 10 GHz to 43 GHz.
=============================================================
NTRO has about 45 M shares outstanding so, at $90/sh, its being valued at
about $4.0 billion. DMIC has about 72 M shares outstanding so, at $40/sh,
its being valued at $2.9 billion. But DMIC has a full product line of
profitable products being sold all over the world while NTRO has its one
product line that's still being tested by customers. NTRO has only had
$12.1 M in sales this last 12 months while DMIC has had $271.6 M in sales.
So why does DMIC's share price continue to lag behind NTRO?
Most analysts have a "strong buy" recommendation on DMIC with a target price
around $54/sh to $56/sh. I would think we should be able to get there at least...
that would give DMIC a valuation comparable to NTRO. But DMIC is a great
company with shrewd management... if they can grab a big chunk of this broadband
access market, I'd think we could go a whole lot higher than that.
Rob |
