David and ahhaha . . .
From the GADR analysis:
>> Press accounts indicate that Teleport has about 250,000 customer lines. A quick calculation puts the purchase price at about $45,000 per line. A (very) rough estimate is that it will require $400 per month in operating margins on each line, just to break even on the purchase price -- before a penny of cash is generated for shareholders.<<
What this fails to consider is that the $400 per month per line not really meaningful - lines are NOT static commodities - one line today is 5-10 lines next year for high-growth companies that shop for bypass capacity. It also doesn't reflect the capacity of, or the application for, those "lines."
Furthermore, by acquiring Teleport, T doesn't have to resort to trying to lease circuits from LEC's in Teleport's POPs to get into cream-skimming the local business.
In the local circuit business, presence is everything, and you have to build it, buy it or lease it.
JMHO.
Mr. K. |
