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Technology Stocks : Broadband Wireless Access [WCII, NXLK, WCOM, satellite..] -- Ignore unavailable to you. Want to Upgrade?

To: Mazman who wrote (777)	10/8/1999 10:17:00 AM
From: SteveG	Read Replies (1) \| Respond to of 1860

CSFB's Doughty: WinStar Communications MID CAP WinStar Signed a 20-Year Dark Fiber Agreement with Metromedia Fiber Network; Reiterate Our Buy Rating John D. Doughty · WinStar announced that it has entered into an agreement to obtain dark fiber capacity in 38 domestic and 3 international markets from Metromedia Fiber Network. WCII will pay approximately $300 million (which includes imputed interest) over 20 years. · As a result, WinStar will have dark fiber rings in a total of 50 of the 60 U.S. markets that it plans to serve. In addition, the agreement includes dark fiber capacity on Metromedia's German long-haul network, providing intercity connectivity between the major German markets. · In addition, the agreement provides that Metromedia will deploy fiber into buildings designated by WinStar in each market, including WinStar hub sites. The agreement will allow WinStar to reduce its network costs and expand its number of on-net buildings. · WinStar is in a unique position to capitalize on the demand for local broadband. Today's agreement takes them one step closer. Point-to-multipoint services are on schedule to be rolled out in the fourth quarter. We continue to view WCII as a core holding in the CLEC group and reiterate our Buy rating. WinStar announced that it has entered into a 20-year agreement to obtain dark fiber capacity in 38 major markets in the United States (including Boston, Atlanta, Dallas/Fort Worth, Los Angeles, Seattle, and Houston) and 3 major international markets (including London, Cologne, and Amsterdam) from Metromedia Fiber Network (MFNX, $25.94, NR). Under the terms of the agreement, WinStar will pay MFN approximately $300 million over 20 years (which includes imputed interest), beginning upon delivery of the dark fiber. As a result of the agreement that extends WinStar's previous agreement with MFN in 12 markets, WinStar will now have dark fiber capacity in 50 of the 60 U.S. markets that it plans to serve. According to WinStar, the remaining 10 markets will be secured by the end of 2000. In addition, the agreement includes dark fiber on MFN's German long-haul intercity network, which connects the major German markets. Under the terms of the agreement, MFN will deploy fiber into select buildings in each market as designated by WinStar. The company will utilize its $2 billion vendor financing pact with Lucent to finance the optronics to light the dark fiber. According to the company, the agreements will add approximately 500 basis points to gross margins in 2000 from a fourth quarter 1999 estimated gross margin of 35%, as the company will be able to reduce third-party intercity expenses. As we had previously factored this into our model, our 2000 estimates remain unchanged. Our 2000 year-end revenue estimate is $652 million and our EBITDA loss estimate is approximately $148 million. Outlook WinStar is in a unique position to capitalize on the demand for local broadband. The company is making solid progress in its market expansion and marketing of multiple services and on-net lines. Point-to-multipoint services are on schedule to be rolled out in the fourth quarter. We continue to view WCII as a core holding in the CLEC group and reiterate our Buy rating. Our 12-month target price is $70.