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.
Yes, I do believe I indicated Average. So CPGA average of $175 for 2003? That still would seem to indicate that the time period to recapture CPGA would still be well in excess of One Year.. Actaully Years if we include Cost of Captial. And forgive me for being a stickler for detail.. But if the AVERAGE CPGA is going to be $175, then one would assume that the CPGA in the first months of 2003 would be higher and then trending down as the year progressed to achieve an AVERAGE of $175.. Does that sound fair? But, it appears you keep "modifing" your opinions?
In this post, you responded that you, quote "misspoke" regarding recapturing CPGA amounts. You corrected yourself and stated at the end of March that.. And I quote..
Friday, Mar 28, 2003 4:00 PM
From: David Ray
"No, you're correct here -- I misspoke. The correct statement would have been that subscriptions being acquired TODAY will be paid for one year from today."
siliconinvestor.com
So I guess, my question is.. Did you mis-speak again? Given your own figures of "projected 03 CPGA of $175 and ARPU of $10 bucks.. I fail to understand, for the second time, how to find your claims crediable?? I guess we will just chalk it up to "superiour analytic skills". After all, I am just a schmuck who doesn't understand these "subscriber models".
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.
Well, the SAC costs main component is your radio subsidy. So maybe I just don't understand "scale in manufactuing and distribution".. But, I was under the opinon that, the subsidy would decrease as unit numbers increased? "Economics of Scale and stuff like that? But, it say the Average "what they call SAC" is actually going to INCREASE on a per subscriber basis... That one has me scratching my head!!! Maybe you call it obvious.. I find it perplexing.
"You haven't stuck any numbers in a damned spreadsheet and you KNOW it."
LOL!!! Well, let's just say I do this stuff for a living!!
"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."
OK!!! If you say so....
So are the subscribers acquired last year paid for today, or is it the subscribers acquired now are paid for next year?? Or, may it's future subscribers acquired in 2005 will be paid for in 2006?? Oh! This higher order math is so complicated! I'm glad we have you around to keep the numbers straight. :-)
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.
Ahhh! Yes!! The Cash Cow syndrome!! Every subscriber model investors Nirvana! However, Nirvana always seems to be just over the horizon. All we need is another 1 million subs, or all we need is CPGA to drop $30 dollars.
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.
And that is what makes a market! It's amazing a "country bumpkin" like me would ever have a chance against a "city slicker" like yourself!!
And so it goes,
PCSTEL |
