SteveG: >> That's a total of 1MM WSTL lines from now until 2002 - this would yield a growth rate of about 35% (150K in 98, 200K more in 99, 275K more in 00, and 370K more in 01). Competitively at, say, $400/line. With 20% pretax margins - yielding approx $40/line after tax. So we may see $6MM (or .40/share) in profits in 98 (providing no other costs/charges), with a 35% growth rate. This would justify a WSTL price of $14 sometime in 98. And THIS is optimistic. First Call consensus estimates are actually for a loss in '98 of <.57> and a gain in '99 of .06. <<
I'll start by saying, I beleive Forward concepts is WAY off. I can see the BA deal generating 1,000,000 lines by 2002.
...The implications of this service -- relieving Internet access congestion and providing a new revenue-generating service -- could lead to some big numbers for Bell Atlantic. When you look at the number of access lines in the combined Bell Atlantic/NYNEX territory -- almost 40 million access lines -- one can imagine the market opportunity represented by ADSL. You can easily get to a deployment set of 500,000 lines to 1,000,000 lines within the four year period with decent pricing and a substantial take-up rate among users...
Where did you get the $400/line cost. The Bell Atlantic deal is in the range of $500-$600/line. That will have to be split between DSC and Westell, so, $275/line for Westell. Westell doesn't have the cost for the line cards, DSC will manufacture those.. + the cost of rewiring for the DLC solution is DSC's problem. Then you can take revenue from the GTE Gov. Srv, GTE CLEC + 3 unannounced contracts + all those other Canadian contracts + add the revenue that Lucent will generate by selling the Westell solution world wide + revenue from HDSL sales.... until later.
>> Competitively at, say, $400/line. With 20% pretax margins - yielding approx $40/line after tax. <<
Can you provide the math on this one? $40/line for a profit of 10%? Why am I getting $80/line after tax? |
