Winstar Comm. (WCII) Message Board

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Technology Stocks : Winstar Comm. (WCII)

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To: Greg Jung who wrote (10276)	2/11/1999 9:09:00 AM
From: Steven Bowen	Read Replies (1) of 12468

Greg, "I don't see evidence that it is less capital intensive" The numbers that get tossed about is that it will cost WinStar about $4000 to put a building on it's wireless network using the new point to multipoint technology, while it cost a fiber based LEC in the neighborhood of $100,000 to put the same building on it's network. What this means is it is econnomically feasible to run fiber to only about 3% of the office buildings in the US. The competition for customers in these 3% will probably be intense. At the same time, WinStar will not face much competition at all by addressing the other 97%, which makes economic sense to them because of their low cost of entry. Besides revenue, you also need to be looking at gross profit margins. WinStar's plan is to have 70% of it's customers on it's wireless network, and 95% on their own switch. Fiber based CLEC's have about 40% of their customers on their network, and resell the ILEC's fiber to the rest. The difference in gross profit between an on-net customer and a resold customer is about 50% (5-15% profit margin for resold vs 60-65% on-net or 25-30% on-switch).

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