To: Sarkie who wrote (379 ) 11/10/1999 11:26:00 AM From: SecularBull Respond to of 2437
Interesting comments on bandwidth from KPNQwest CEO... >> KPNQwest CEO Comfortable With 70% Sales Growth Estimate AMSTERDAM (Dow Jones)--Jack McMaster, the chief executive of newly listed data communications company KPNQwest NV (KQIP, news, msgs), said Wednesday he was "comfortable" with analysts' estimates of 70% annual sales growth for his company "for the next several years." KPNQwest, a joint venture between Royal KPN NV (KPN, news, msgs) of the Netherlands and Qwest Communications International Inc. (QWST, news, msgs) of the U.S., had its initial public listing in Amsterdam and on Nasdaq Tuesday. Shares in the company had been issued Tuesday at EUR20.00, the very top of the subscription price range, and closed at EUR30.30. "I can say very little about the (large initial increase in KPNQwest's) share price," McMasters said in an interview with Dow Jones. "Investment bankers determine the issue price, and the market takes over from there. But I would hope it doesn't represent the last word in terms of value creation for our shareholders." KPNQwest plans to use the EUR880 million raised via the listing to help fund its construction of fiber optic networks around Europe and to develop its business providing data communications services to companies. McMaster said that KPNQwest had revenues of EUR100 million from data transmission in the past year, and that it has a huge capacity for expansion: of the 98 fiber-optic lines that make up its current network around Western Europe, just one is currently being used, and of the 80 channels within that line, 26 are being used. "If we can light up our entire network, I'll be a happy man," he said. The KPNQwest network is built with two conduits, one of them empty, so that a new fiber-optic cable - or even a new technology line with higher speeds than fiber optic - can be installed in the future without digging up the ground. McMaster said he isn't worried about a glut in data transmission capacity in the future, despite the large number of companies laying fiber-optic lines in Europe, as he believes growth in demand will cancel out falling prices. He said he expects data transmission prices to fall around 30% annually over the next five years, but that growth in demand will be "exponential." He said KPNQwest ultimately plans to recover two-thirds of the costs it incurs laying fiber-optic lines by selling some of those lines to other companies. Around 20% of the cost of the lines in operation has already been recovered, he said. He also noted that KPNQwest plans to make acquisitions of companies that own high-speed "local loop" connections between business customers and KPNQwest's long-distance lines. KPNQwest won't discriminate between local loops that use fiber-optic lines, cable lines, DSL or various wireless connections, as long as they have high-speed broadband connections, he said.