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Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: PaperChase who wrote (2644)	10/13/1999 5:25:00 PM
From: Robert Sheldon	Read Replies (2) \| Respond to of 15615

Yes but they have a fixed cost for putting the fiber in the ocean and that capital expenditure was debt driven. Debt payments aren't going to decrease with fiber rates. <g> Ok, I'm tired and grumpy today (been in the office since 4:30am) so I'll try my best to be gentle . . . Do you understand what the term “elastic” means? In telecommunications we find that we have a VERY elastic environment. In short, it means that there is a positive reaction between price declines and demand. In our lovely world of underwater fiber this translates such that every 50% drop in pricing our friends at GBLX get a MORE than a 100% increase in demand. So you should be cheering the rapid decline in pricing (its at a rate of approximately 52% per year depending on the termination points). I have often wanted to hold cheering sessions when I check the monthly survey I receive on pricing for various markets. As for your debt quip . . . more money in the door due to the DECLINE in pricing will mean that we have MORE money to pay down the debt or upgrade our systems (at ~20% of the original cost to MORE than double capacity – what a DEAL, we just saw this with AC-1) or buy out other links that would otherwise be considered WEAK without us. GBLX creates value. I found it quite rummy that across the pond the FT and others in the British Press were panning that Racal deal . . . Look folks we purchased Racal assets on a basis of a 6 year (or less – probably much less) GBLX EXPENSE AVOIDENCE. This means that the actual payback will be even shorter due to the additional traffic (read revenues) we received with the deal. If you don't believe me about bandwidth being very elastic in relation to pricing, YOU SHOULD NOT BE IN THIS STOCK! As such you will probably find plenty of sympathizers over at most any bellhead thread as well as AT&T. They all will be throttled by their copper engorged overhead. The landscape is rapidly changing. It is time to choose your path.

To: PaperChase who wrote (2644)	10/13/1999 6:45:00 PM
From: Marty R	Read Replies (1) \| Respond to of 15615

It may appear that they have fixed costs for laying the line. However, they recently cut their time of laying a segment by several months ... so fixed costs can be decreased through efficiency. Also, the technology continues to improve as far as the amount of data throughput they have on this same fiber they've already layed. So with these improvements (with more to come) they increase their capacity without laying another mile of fiber. On the other hand the fixed costs that do exist are to GBLX's advantage. This is a barrier to competition. These are just my observations. I am by no means an expert on this company or subject. marty

To: PaperChase who wrote (2644)	10/13/1999 10:44:00 PM
From: Dan B.	Respond to of 15615

Fixed costs? Yes. I recall that GBLX received a sum greater or equal to the total construction costs of the Atlantic Crossing with the sale of the first 10% of it's capacity. They recently doubled that capacity for a mere fifth of of what they received for the sale of that first 10% capacity. The model says costs will fall faster than prices received. This follows the model as it has been with the history of computer chips, phonograph needles, and etc., after start-up costs are recovered, prices fall and revenues increase. Dan B