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Technology Stocks : General Instrument Corp.'98 (GIC)
GIC 29.47+0.9%3:59 PM EST
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To: Black-Scholes who wrote (562)4/25/1999 8:34:00 AM
From: matt gray  Read Replies (1) of 615
 
My take is that AT&T increased the ante on Cable companies
valuations because it sees the legitimate revenue associated
with IP telephony. AT&T did the business case and see the the value per subscriber increases dramatically if you caluclate in local residential telephony into the equation. They will move rapidly to capture this marketshare. Obviously they are concerned about price, but they are also concerned about deployment schedule and their window
of opportunity in deploying these services. The schedule advantage
that GIC has, because of their product pipeline and work on the dct-5000 should maintain high margins for awhile.

Furthermore AT&T business segments are under attack given the liklihood that BA and some of the other RBOCs will be able to
offer long distance in the near future. CATV Rights of Way will allow them to compete directly without relying on the local telephone monopoly to offer integrated telecommunications to their business customers via SONET.

AT&T is a powerhouse, and they are demonstrating why they have gotten
to where they are. Some amazing moves, I'm impressed at these recent moves. They sold off a bunch on non core business segments to finance
these deals. Excellent strategic planning. They need GIC and a few dollars per box won't be the deciding factor. Availability and function will be as important for schedule reasons.
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