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Technology Stocks : SDLI - JDSU transition

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To: OWN STOCK who wrote (3237)	7/8/2002 4:05:46 PM
From: OWN STOCK	of 3294

Note in proof: From LightReading... LONDON -- Research by London-based consultancy, Tarifica highlights the fact that many telecoms companies have for the past TWO years consistently failed to manage margins to a satisfactory degree - instead choosing to chase 'mega-deals' or increase customer numbers without increasing ROI. Recent accounting debacles have illustrated the inherent problem with the current telecoms industry. Companies have spent far too much time and effort in chasing shareholder value and inflated profits at the expense of the business itself. Today these same companies urgently need to assure themselves and their investors that they are getting the most out of what they earn. The most obvious, and to date the most ignored way of doing this, is by 'managing margins.' Very few telcos have incorporated margin management into their overall financial strategy to any significant degree. Indeed if we review recent share price drivers, the emphasis has shifted from telecoms performance, to ramping up pure customer numbers, to delivering quality of service and finding return on investment. None of these has, however, proved a panacea for success. Key statistics: Revenue losses are estimated to be between 4% and 10% of total revenues A major international IP and data services provider claims to have recovered more than $US20million in access costs and unbilled revenue by combining cost management and revenue assurance efforts Losses due to fraud account for between 3%-5% of revenue Short and sweet version: Increase sales regardless of cost. Violation of the most basic business formula: sales-cost=margin, and its corollary no margin=no business. Entire article at: lightreading.com -Own

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