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Technology Stocks : GX Investors Thread
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To: Spekulatius who wrote (116)8/23/2001 11:16:03 PM
From: Ally   of 586
 
>My 2B$ guestimate is simply based on an average 5 year depreciation time (linear) for 11B$ on assets. The ranges that GX gives for equipment are to wide (2-30 years) to estimate the depreciation rate of GX's assets. I'd guess that a router is virtually worthless after 2-3 years, but that fiber in the ground can be used 10-15 years.
Robert Sheldon's estimate of 1B$ would imply a linear depreciation time of 11 years. This sounds very long to me - who knows where fiber optics technology will be in 11 years?<

Just based on 10K information, GX estimates useful life of the transmission equipment to be in the range of 7 to 25 years. Total cost of transmission equipment around $7B, so based on depreciation method of estimation, maximum maintenance capex would be $1B.

$2B for maintenance appears too high. Next year's capex is $2B and that includes new installations. As for keeping up to nuff, how essential is it to upgrade with the latest optical gadgetry? Many of such technical questions would have to be answered by the engineers and operational staff of the network itself. Hopefully when GX firms up next year's capex budget, it'll be broken down into (a)repairs and maintenance (b) upgrades of existing network (c) new installations.

p.s.

Robert pm and said that his estimate of $1B is based on talking to the company and internal work (I thought so... wouldn't just be based on depreciation schedules).

Also said that while he won't be posting, he would still be providing the financial numbers when they are completed.
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