My take on LMDS and CVUS:
I agree with Steve's view that LMDS has tremendous potential
as a technology. In the long run, it could drive a stake through
the heart of ADSL and cable modem companies, because of its
extreme deployment flexibility. Note also that there is a
subtle difference between services that LMDS operators will
be able to offer and those that operators in the 24GHz
(TGNT) and 38GHz (WCII) bandwidth will be able to offer.
To be able to offer the full range telephony/Internet access/
video services, I suspect that operators need at least
one GHz of bandwidth, unless they deploy highly efficient
digital modulation schemes (such as QAM) which until now
remain somewhat unproven in this part of the spectrum.
Thus WCII can certainly offer telephony and data, but I have
my doubts concerning the inclusion of video, unless WCII
gets more licenses. The 39GHz auction might create such an
opportunity, but the bottom line is that to exploit fully
the potential of LMDS, one needs a huge amount of bandwidth.
I am less sure about CVUS, but would not be as severe as Steve.
First of all, their lack of progress was significantly influenced
by the FCC's perpetual delay of the LMDS spectrum auction.
Without licenses, you cannot do anything, and clearly the FCC
dropped the ball. Also, CVUS has been constrained by the equipment
commercially available. They first deployed a rather simple FM
system, and are now deploying the HLIT modems based on QPSK modulation. Because they were the first in the field, their
options were limited. Hopefully, they will upgrade their
infrastructure to the more sophisticated systems developed by
HP/STII or Bosch Telecom.
Next month will really tell whether CVUS is either
a long term hold,or a stock which should be sold
when it reaches a more realistic valuation around $15.
If Shant Hovnanian negotiates partnerships with bigger players
and takes big steps towards creating a nationwide LMDS
operation, CVUS could be worth holding for the long term.
Otherwise it will be a sell. As Steve suggests, it is
high time that experienced telco or cable/IT professionals
should be brought into CVUS's management team.
Regards,
Bernard Levy |
