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Technology Stocks : METROMEDIA FIBER NETWORK (MFNX) -- Ignore unavailable to you. Want to Upgrade?

To: Ellen who wrote (840)	2/16/2000 12:39:00 PM
From: Beltropolis Boy	Read Replies (1) \| Respond to of 1983

more PR ... ----- Metromedia's Fiber Network: A Tale Of 67 Cities 02/15/2000 Dow Jones News Service By Johnathan Burns NEW YORK -(Dow Jones)- Metromedia Fiber Network Inc.'s (MFNX) President and Chief Operating Officer Nicholas Tanzi likes roadway analogies. As in "interstates," as in "access roads," as in bridging the gaps between the two. Which is a good thing - the roadway analogies part - when one considers that most people don't quite yet grasp what Metromedia and companies of its ilk actually do. For the uninitiated, Metromedia builds fiber-optic networks, a.k.a., broadband highways. On Monday, the company announced it would spend $1.4 billion expanding its communications network in North America and Europe. The expansion will provide more capacity for businesses, Internet service providers and content providers along a 29,000 route-mile network that will reach 67 cities. "If you look at the last century's economy, it was driven by (the building of) railroads and highways," Tanzi said Tuesday. "What Metromedia has been doing is building the local highways and access roads. Now we're bundling them with the long-haul highways." Imagine fiber optics as the road of the new century. As demand escalates, which it most assuredly will, Metromedia is banking that its all-optical network will be used to push data from, let's say, Frankfurt to San Francisco. And the all-optical network, Tanzi says, means the data traffic (and video) won't have to move over slower lines built a half century ago to handle voice traffic. "If you're looking at every other carrier, they're building a hybrid technology structure," he said, referring to a network of fiber and copper carrying voice and data. "A chain is only as strong as its weakest link. We don't provide telephony service." Tanzi says, therefore, that customers who use Metromedia's network will run less risk of losing data than they would along a network built for voice and then upgraded for data traffic. The expansion has already begun. Some areas will be complete soon, but the overall upgrade is expected to be finished within the next 12 to 18 months. The expansion will reach 14 new Internet service facilities run by AboveNet Communications, which Metromedia bought for $1.37 billion last year. Metromedia's fiber holdings have attracted interests from the likes of Bell Atlantic Corp. (BEL), which has socked $2.2 billion in Metromedia and could eventually convert the investment into a 19% stake in the company. "I hate to use it, but they really are providing an end-to-end fiber solution," said Sands Brothers & Co. analyst David Zale. "The idea is (their customers) want to move data faster, move it more directly. The traffic doesn't have to go through as many switching stations." Zale said Metromedia's $1.4 billion expansion sounds expensive, but, "From everything I keep seeing, it's like the (adage), 'You build it, and they will come."' "I think they're out there doing all the right moves," said Zale, who has a buy rating on the stock. He's trying to come up with a new price target. "It just keeps pushing through all our targets." Tanzi said Metromedia is already getting positive feedback from current and potential customers. In January, the company announced that it had passed the $2 billion mark in total service contracts. "At the end of the day, what this is about is creating that end-to-end optical platform," Tanzi said. "For the first time, we believe, someone's marrying together the local to long-distance distribution. Some folks have offered the fiber, but no one's in 67 cities around the globe." Tanzi said the company had already given guidance to analysts about the capital expenditures, meaning the First Call/Thomson Financial survey projecting a loss of $2.36 a share for 2000 includes the spending. As for new customer announcements, Tanzi would only say, "Stay tuned." Shares of Metromedia recently traded down 8%, or 6 3/8, to 73 5/8 amid a broad Nasdaq selloff. Volume stood at nearly 1.2 million shares versus the daily average of about 2.9 million. Metromedia set a 52-week high of 83 last week and was trading four times higher Tuesday than its 52-week low of 17 3/8 set last February.