Gotta beat the drum on these points yet again.
-Strategis says $800/month for broadband access in right about the middle of our DCF models.
-Strategis further claims this access will primarily come from cable and DSL, which don't come close to comparing to P-MP capabilities in either speed or reliability.
-Currently, almost all DCF models are using numbers in the $60 to $80/month range. This is for voice. There are currently no BB access revenues figured in to DCF models, though many analysts admit that their SHOULD be, but that they didn't really know numbers to plug in.
-The cost to BB access is negligible once voice is being offered. Therefore any revenues from BB access drop close to 90% (according to one high profile telecom/WCII analyst) to the bottom line DCF projection.
- So let's consider that at 25 to 30 times cable (shared per user) or ADSL in speed, and a significantly higher (and perhaps more important) reliability rating, could P-MP be worth conservatively 10 times this $800 monthly revenue number? Would it be conservatively reasonable to say it's worth at least 1/2 this number?
-Anyone who thinks that Vogels $97, or Grubman or Governali's $60ish targets for EOY 98 are high (relative to our current trading price), try adding ~$360 (90% of our very conservative $400/month access revenue) to these numbers resulting in something in the $400-$450/share range at EOY 98, DCF justified.
- Crazy numbers? We'd get an $800/share range EOY '98 if we simply used Strategis' number, which is based on ADSL and 2 way cable modems. And at least an order of magnitude higher than that if we adjust by P-MP's comparable capabilities.
Now, plug in absolutely the most CONSERVATIVE of scenarios and assumptions into the current DCF models, adding some conservative ballpark monthly BB access revenue number. Are we undervalued sitting at $30, 7 months into '98?
[Yahoo's Gentleman-Boyle, if you are reading this, message me here or drop me an email] |
