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Technology Stocks : Newbridge Networks

NN 14.21

+1.7%

Nov 28 9:30 AM EST

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To: Ian@SI who wrote (6047)	8/20/1998 8:44:00 PM
From: Peppe	Read Replies (3) of 18016

Ian, Allow me to be a bit of a devil's advocate on this one ... I did a little research. The biggest cost of deploying an LMCS network is not in the ATM switches but in the RF radio side. It seems as though Alcatel is providing the radios and NN the ATM component. To call this a $ 1Bwin for NN is misleading. To be conservative, let's say half of the $ 850 Mill. goes to NN. That gives us $ 425 CDN, over 5 years. So now it's an average of $ 80+ Mill. per year in new business. Convert that to US dollars, and were down to $ 50 Mill. US per year. Factor in the uncertainty of the technology (no one has successfully rolled out a large scale LMCS/LMDS network in the world yet) and I can understand why the stock isn't trading at $60 US yet. Don't get me wrong, these were big wins for NN, right in NT's back-yard. But let's leave the champagne on ice and hope NN can win some more traditional SP business. Cheers, Peppe

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