CPGA for the full year 2002 was $430.
That's AVERAGE CPGA. Which started out the year much higher (which it obviously would, since there were very few gross adds to allocate the significant fixed components to), and ended the year much lower. The average CPGA for 03 is projected at $175 and for 04 $120, which means by the end of 04 you're looking at something in range of $50-75.
Our average subscriber acquisition cost was $116.03 during 2002. The amount of these total costs will vary in future years, but is expected to increase in the next year as the number of subscribers and revenue increase.
They were stating the obvious -- if you go from 500K subs to 2.75-3.0M subs, the total SAC would obvious increase. But the average SAC will NOT increase, which is what you seem to be implying.
So you see, it really has very little to do with how good the service is.. Or how niffty the radios are.. It all comes down to sticking the numbers in a spreadsheet and finding out that they don't work out.
You haven't stuck any numbers in a damned spreadsheet and you KNOW it.
I hate to be so nasty about it, but you show up here every few months, ACTING like you know what the hell you're talking about, but you're numbers just make zero sense. If you actually look at the business, instead of trying to impute some other business' cost structure on this one, you would have a little credibility.
You seem to ignore the most important single feature of this business: The cost structure is largely fixed, meaning that once break even volume is hit it is a virtual cash cow, with between 40 and 50% of incremental revenue dollars falling to the bottom line.
I've analyzed one hell of a lot of financial statements in my time; and NOT ONCE have I seen a business with this kind of scalable profit potential. |
