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Technology Stocks : Winstar Comm. (WCII)
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To: limtex who wrote (10027)1/15/1999 8:25:00 PM
From: Bernard Levy  Read Replies (3) of 12468
 
Hi limtex:

To be frank, I have been rather puzzled by the rise
in the WCII ARTT and TGNT stockprice after the NXLK
announcement. While the high price paid for the licenses
validates the broadband wireless model, the LMDS spectrum
rights formed a very unique property. I would have
expected ARTT and TGNT to sell off on the news. In
a nutshell, they will have to compete with two integrated
carriers (NXLK and WCII) which offer a combination
of broadband wireless local access (and fiber local
access for selected buildings in the case of NXLK)
and longhaul facilities (deal with WMB for WCII and deal with
LVLT for NXLK). The way I see it, TGNT and ARTT will
probably be bumped down to 3rd and 4th in the broadband
wireless market. Of course, TGNT is still ahead of NXLK,
but a lot of the infrastructure NXLK needs is already in
place, so they should catch up fast.

Regarding WCII numbers, WCII's stockprice does not leave a
lot of room for error-- a lot of fiber CLECS (ICIX, ESPI, GSTX)
were mauled very badly last quarter after posting
disappointing numbers. The one strong positive element
sustaining WCII is the pending GSA contract. So a
moderate amount of short-term apprehension (combined
with long-term optimism) may be warranted here.

Best regards,

Bernard Levy
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