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To: LTK007 who wrote (27590)	8/1/1999 5:34:00 PM
From: Vendit™	Read Replies (1) \| Respond to of 41369

max90 You really should consider covering soon. Vendit

To: LTK007 who wrote (27590)	8/1/1999 5:41:00 PM
From: DOUG H	Respond to of 41369

While T gets it's panties in a knot: CAP-EX is capital expenditures ie, DSL upgrades. Look for "NEWS" of significant subcriber growth after all the "smart $" is done buying. RBOC CAP-EX CREEP CONTINUES KEY POINTS * Three RBOCs are further raising their 1999 cap-ex estimates: * On Friday, US West increased capex plans for the second time to $4B from $3.5-3.8B. The latest increase represents 25% increase from its original plans at the beginning of the year, adjusted for software capitalization. * Bell Atlantic indicated its intent to further increase capex and will review the items at a breakfast meeting this Wednesday. The first increase, representing a 7% increase, was announced just five months ago. * SBC will likely add $2-2.5B of cap ex to its current budget over the next few years for the accelerated broadband deployment. * This supports our industry call on the impact of increased network usage and new revenue generating services driving robust operator spending and subsequently strong revenue growth for telecom equipment manufacturers. * We believe Lucent (LU (1)-$67), our Analyst Best Call, and Nortel (NT-$86) are the primary beneficiaries of increasing capex in North America. Nortel is expected to report its Q2 results tomorrow after the market close; our EPS estimate are $0.51, a penny above the consensus estimate of $0.50. CAPITAL CREEP CONTINUES Less than a year ago several of our competitors had been fanning the flames of fear that cap-ex from Regional Bells would fall off in 1999. This has become a typical year-end concern of telecom equipment investors, intensified by the weak global markets in 1998. At that time, we published stated cap-ex plans of United States telecom providers and our estimates of where they would end up by year-end 1999. Our estimates were obviously higher than the stated plans of the companies. Since that time Ameritech, AT&T, Bell Atlantic, Sprint PCS, US West, Western Wireless, NEXTLINK, MCI Worldcom and now SBC have raised their 1999 cap-ex estimates beyond our estimates. We expect cap-ex plans to continue to increase throughout 1999. RBOCS AGAIN INCREASE CAPEX RBOCs were among the first operators to increase their 1999 capital expenditure plans, responding to surging growth in traffic (both wireless and wireline) and investing in broadband access systems. Today, we are reporting increases in 1999 capital spending programs of three RBOCs, two of which have already increased their plans earlier in the year. * SBC, a name we have not yet seen announce a capex increase, is likely to add $2-2.5 billion to its current capital spending budget over the next few years as it accelerates broadband deployment. The company's current guidance for 1999 capex is $6.2 billion. * Bell Atlantic has indicated that it would further increase its 1999 cap-ex plans after a $500 million increase to $7.5 billion five months ago. The company will provide further details of the increased budget at its breakfast meeting on Wednesday, July 28. * US West announced another increase in 1999 capital spending to $4 billion up from $3.5-3.8 billion ($2.8 billion at the beginning of the year). To date, the company has increased its original budget by $800 million or 25%, excluding $300-400 million on capitalization of previously expensed software