Steve,
I attended today a conference where a VP of Oxygen described the project. I am not very confident that the total vision will come true, or that Alcatel will be a major supplier.
Here is what I noticed
The total cost of the project is estimated to $10 billions It will be implemented in 5 phases. The first phase will concern transatlantic links. The cost is estimated to $3 billions. It will be necessary to raise $ 1 billion. IPO has been delayed due to poor market conditions in Europe last year (I guess he was referring to September). It is now planned for the 2nd quarter of 99.
It seems that there is no detailed timeline for 2nd phase… not to mention the others.
The good thing is that IPO is expected very soon. If successful it will give a boost. And if ALA lands fibre contract (probably not before end of year then I guess), that would be neat.
The technology partner is AT&T. ATM switches will be implemented at each landing point (99 in 78 countries). Network will be ATM over SDH Total capacity will be 1280 Gbps, made of
10 Gbps (SDH) x 32 channels (WDM) x 4 pairs
I am not sure that AT&T is familiar with Alcatel solutions. So, I believe that Lucent would have a big edge here for ATM.
Customer might be incumbent telcos, but more likely ISPs or new entrants willing to get immediate international network. Local regulation may restrict the list of customers. North American and European markets are the most liberalized currently.
As to article you posted, I found it very interesting as well. Definitely, Framatome is out within a few months. Energy cables soon, by the end of the year? The question is what will ALA do? Invest in more research? May be. But time is the issue isn't it? ALA will be able to sell some of Alstom shares next year I guess and that will be a lot of money.
Framatome is probably not going to be a big boost though. It represents I think a little bit more than $1 billion, but the French government will probably tie ALA's hands. Give more shares of Thomson? That was presented in the French press you remember? I think that as such it would have little interest for ALA. But Thomson is a public company, so ALA could sell. Except if the government gives the shares with a clause stating that ALA cannot. They could do that. I guess ALA will be ruthless in saying that if the company does not have the resources it needs to invest in its business, it will lay off people in France. Well, anything can come up. We will see…
I am amazed by the fact that the stock is still going down. ALA may not change the world, but it is to me an investment as predictable as it can get (and up!). I have added more stocks last week (no more calls though, as I am getting uncertain about WHEN the stock will pick up, and I am already quite long on Calls), and may continue. Of course,it might be the opportunity of the year, but it is always worrisome when every body else thinks the opposite (except on this thread).
Cheers
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