DLJ synopsis
DLJ says that Ascend management gave an upbeat presentation at AEA yesterday. ASND stated that October was on plan and could set the stage for a more orderly quarterly growth.
They indicate that the start to this quarter was better than any of the preceding three quarters.
ASND's operating model presented was unchanged from the model outlined during the recent earnings conference call.
They say that continued consolidation in ISPs will impact
the industry going forward, in the timing of buying decisions and
implementations.
They state that ASND's ATM business appears to be gaining strength, with frame relay facing some moderate price actions next year.
They say that although ASND sees significant revenue growth year over year, ASND did state that that growth would not be a straight line up quarter to quarter.
Regarding a 56K standard, the ASND stated that they see a standard being adopted in the January timeframe, and they indicate that once a standard is adopted, its timeframe for an upgrade to a standard will be six to 12 weeks.
UBS says that ASND gave an update for the TNT in international markets. It is being deployed in the U.K., Germany and some Nordic countries. It is in test mode in Japan, with planned deployments for Q198.
They say ASND said that software development is underway in
some Eastern European countries, as well as some in Asia.
ASND management did site macro issues in Japan as having short term impact and that they see remote access pricing remaining stable for the fourth quarter, with pricing action occurring in the first half of 1998.
They say that ASND said that recent pricing action has taken place in the discounting from list prices, rather than taking
down list and street prices in similar percentages.
ASND believes that list prices will decline in excess of 20%, with street prices declining significantly less. ASND also sees frame relay list prices falling between 20%-30% in the first half, with street prices falling in the 5%-10% range.
Theycontinue their rating for Ascend as Market Perform. |
