Long-time lurker, first-time poster
Been put off by the fink distraction, so I'd like to post what, IMO, are the basic parameters that WCII holders should be concerned about. I keep these in mind as I monitor my investment in WCII.
To be successful, WinStar will have to (1) build local networks rapidly and cost effectively, (2) expand these networks such that they are capable of handling both voice and high-capacity data transmission (as data will be comprising a greater and greater percentage of overall traffic over the next years), and (3) generate a customer base who will generate traffic to put over these networks. It seems to me its all about snagging and retaining customers and improving margins by controlling as much of the transmission facilities as possible
So, how is Winny doing? Well, based on publicly filed reports (which I tend to give more credence to then Mr. Fink's "sources" as such filings carry with them liability for omission and misstatement), I would say very well.
First, Winny has network presence in 21 cities now. That's 21 cities where customer traffic is being carried through higher margin switches .As these network evolve, Winny will be carrying a customer call from that customer's building to WinStar's switch over 38 GHz capacity (no LEC facility so far). That traffic is then routed through WinStar's switch (still no LEC) and then carried through to the public network. That will mean control of network, and in turn, good margins. How can a CLEC improve margins? By efficiently using the network it controls. It seems that 38 GHz based networks, once mature, will really be able to provide good margins because there is minimal buildout without corresponding demand (i.e Winny won't put a radio where there is no customer to warrant such installation) and the infrastructure can be easily redeployed (i.e. if customer cancels, take the small-sized radio down and reinstall it for a new customer or, if an existing customer needs more capacity, take the older generation radio down, install higher capacity radio and reinstall the removed radio at a new customer location where such customer demands only small amounts of capacity). Winny seems to be meeting the challenges of parameter number 1.
WCII's recent acquisitions of Midcom and Goodnet seem really smart to me. Based on the press releases and 8-K, Goodnet has a national ATM network and Midcom has a frame relay-based data transmission network (I really don't think Winny bought Midcom for Midcom's long distance reseller business - that being a good example of how a company will not be successful if it doesn't control the network over which it provides its services). These acquisitions really boost Winny's data service capabilities. So, it seems that Winny is building, on a cost-effective basis, a voice and data network. Winny seems to be meeting the challenges of paramter number 2.
Parameter number 3, ultimately is what its all about. Customers and dollars. Well, lines installed and lines ordered seem to be ramping up at levels that satisfy all the telecomm analysts on Wall Street. CLEC revenues seem to be growing rapidly. So the demand seems to be there. As Winny matures in its 21 current markets, we should see continued rapid ramp up, especially as Winny also seels its data and Internet access services as part of its integrated telecomm services packages. People want an alternative to the RBOCs and people want a single provider for telephone, data and Internet. WCII looks like its gearing up nicely to meet these desires.
Risks: Plenty, but none insurmountable - Integration of newly acquired Goodnet and Midcom operations, failure on customer satsifaction and retention resulting in high churn rate, competition from RBOCs (as of now though, RBOCs cannot offer fully integrated services of voice, data and long distance, CLECs can. Further, RBOCs do not have fiber optic capacity running into majority of office buildings, most of which are off the fiber optic rings and receive last mile through copper etc. - winny can bring fiber quality to the door step fast and relatively cheaply).
Keep up the good, fink-free dialogue.
Lurk mode, re-engaged.
Regards
Glider |
