Model:
My model shows that if they hit 2,000,000 subs by December 31st, 2002 (as management and the current rate of additional subscribers support), and that IF they stopped investing in new subscribers at this point (only added what they need to maintain the 2 MM after churn), they could earn around $20,000,000, or 57 cents/share annually, and cover their debt (less the 200MM debt paydown for covenant purposes).
I am not recommending that they do this, as their model is maximized by adding as many subs as fast as possible at this point, but as a point of reference from the investing standpoint, this is not a terrible "back-up" plan.
I would suggest they consider "leasing" rather than selling the phones at these discounts, then they could at least put unused phones back in service at no equipment cost to them. |
