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Technology Stocks : Netro Corp - (NTRO) -- Ignore unavailable to you. Want to Upgrade?

To: Mark Oliver who wrote (743)	8/17/2000 11:24:24 PM
From: jay silberman	Read Replies (2) \| Respond to of 792

For all you NTRO fans - from today's Briefing.com: Stock Brief -------------------------------------------------------------------------------- Updated: 18-Aug-00 Fixed Wireless Access [BRIEFING.COM - Robert J. Reid] In order to receive broadband access, many people limit their decision to DSL and cable. However, there is another technology which makes sense for some which offers its own set of advantages called fixed wireless. Fixed wireless is a relatively new technology designed to bridge the service gap in the "last mile," or the part of the network connecting the customer premise to the carrier's point of presence. What Is Fixed Wireless? Broadband wireless access, or more commonly known as fixed wireless access, is deployed in a point-to-multipoint, hub-and-spoke architecture, in which a central hub provides telecom services to multiple subscribers at multiple points within the cell covered. At the hub, is a large base station with a radio unit on top. Subscribers have a radio unit that is "fixed" to the top of the building which runs the signal through a subscriber access system which is connected to PC's and phones in the office providing both voice and high-speed data services. The industry is growing more quickly in Europe and Latin America than the U.S. for both regulatory and market reasons. In Europe, most governments allocated spectrum on a "use it or lose it" basis whereby the companies with the license were required to deploy the technology within a year, whereas, in the U.S., licensees can deploy the technology when it fits their needs. Another reason for the higher demand in other parts in the world is the lack of fiber infrastructure which is needed for fixed wireless - this applies for rural areas within the U.S. as well. A fixed wireless network can be built much faster and cheaper than a wireline system. A company like MCI WorldCom (WCOM) would especially stand to benefit as it lacks the cable network of AT&T or the local phone wires of the Baby Bells. Fixed wireless is an advantageous way for it to service the broadband access market. In the U.S., broadband wireless access is attractive to Competitive Local Exchange Carriers (CLECs) entering the market for the first time because it enables them to bypass the incumbent's copper local loop network where the incumbent may drag its feet. Furthermore, the physical properties of broadband wireless access make it uniquely suited to meet the small and mid-sized business market's need for symmetrical transmissions and high-volume voice and data traffic, a large potential margin and revenue source. Market Size Industry analysts expect the market to reach $1 bln by 2002 and $2 bln by 2003. As such, giants like AT&T (T), MCI WorldCom (WCOM) and BellSouth (BLS) are buying licenses for part of the wireless spectrum . The market for the equipment needed to provide the services is expected to be in the $12-$16 bln over the next 3-4 years. As such, the market is sufficiently lucrative to attract a number of large telecom equipment makers including Alcatel (ALA), Ericsson (ERICY), Marconi (MCONY-London), Netro (NTRO), Newbridge (NN), Nortel (NT) and Spectrapoint, a joint venture between Cisco (CSCO) and Motorola (MOT). Pure Play Equipment Provider A fixed wireless equipment provider that we like is Netro Corp. (NTRO 60 1/8) which is a pure play on the sector. Netro is in a strong position as it is the market leader and has the advantage of being first to the market. Netro uses proprietary technology which allocates bandwidth on demand. Netro uses a packet-based system which optimizes the use of the spectrum. In other words, instead of dedicating a certain portion of the spectrum for a customer which takes up that space regardless of whether the customer is currently using it. Packet-based allocation sends data and voice back and forth in packets only when there is something to send. This is a more efficient use of the spectrum as the provider can allocate the spectrum according to who needs it at the time. Also, the company has partnered with some top notch companies. Recent partners Cisco and Nokia have joined Lucent, Motorola and Siemens in choosing Netro's AirStar system for their broadband wireless access needs. NTRO's growth is fantastic as Q2 revenues came in at $15.5 mln, up 385% yoy and 48% sequentially and is expected to be profitable by next year. Growth should continue to be fantastic as Netro will be able to leverage its partners' size, especially in Europe, for increased sales. However, we recommend holding off on the shares in the near term as the technicals are not great at this level. The stock has not rebounded aggressively enough off the $45 low earlier this month, but keep it on the radar screen.