Ok, here I go again . . . Some good questions from Mr. Oliver . . .
*LMDS has been slow deploying as have MMDS. What is your opinion on acceptance?*
LMDS is actually rolling out very fast. TGNT and WCII and NXLK are roaring ahead in their pursuit of an estimated 740,000 buildings.
TGNT claims rights to more than 2000 buildings
WCII claims rights to more than 4,200 buildings
NXLK claims rights to more than 10,400 buildings
TGNT has the lead in deploying point to multipoint systems. TGNT is offering services in 40 markets nationally, and of these more than 25 use point to multipoint configurations. A single TGNT hub can serve as many as 100 buildings – this should give TGNT an edge. However, with 740,000 buildings, there would seem to be plenty of business out there for all contestants.
George Gilder gives the following rule of thumb: for buildings with fewer than 12 lines coming in, go copper; for those with more than 450 lines, go fiber; for the rest broadband fixed wireless is likely to prevail (LMDS, MMDS)
The dishes (antenna) are very small usually two feet across and sit atop buildings, not on towers.
*I have followed MMDS, and have seen a recent buying binge from Sprint and MCI as they acquire license holders to get last mile connections. They seem to prefer MMDS, although I'm not sure.*
Do not be confused by the MMDS / LMDS thing. All FON and WCOM are trying to accomplish is grab a bunch of ‘spectrum'. They do not care of the particular range as long as it will accommodate their needs. In the case of FON and WCOM, their purchases allow for the bypass of traditional copper behemoths (read dead ducks) for last mile solutions.
*I don't really understand the cell phone angle. Are you saying VARL has a chip going into handsets, or base stations? If they had a chip in every hand set, that would be great.*
Varl has VCOs and PLLs going into basestations and VCOs going into handsets. Imagine this . . . Quoting activity (a favored gage of interest and business climate) is roaring. Management stated that quoting activity for handset ‘million piece' (this denotes high volume) orders have rocketed 400% to 500% over the same period last year. No less that 8 companies have quotes out to VARL at this level. I believe that it is just a matter of time before VARL hauls down one of these monsters. I have been assured that timely capacity expansion will not be a problem down the road. Think in these terms . . . 220 million handsets will be produced in 1999 alone. Each handset needs 2 VCOs. That makes ~440,000 VCOs to meet demand. If VARL gets just 2.5% of this market, they will double their entire top line revenues (assuming ~$1.625 paid per VCO – this is a very low estimate). Due to their technological advantages for higher bandwidth applications VARL would have to fall all over themselves not to get business.
VARL's market cap is only ~$40MM. The handset market alone is $715MM (estimated very conservatively). |
