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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: John Curtis who wrote (20332)	9/12/2000 1:08:56 AM
From: add	Read Replies (2) \| Respond to of 21342

So SBC rents the copper to COVD, COVD installs and provisions and then sells back to SBC at a higher price ? The $600M is huge. It would seem that COVD is charging the customer and they are charging SBC(above an beyond the copper leasing costs). If it costs $5.75/ month to lease the line and they charge $40/month to the customer, COVD has about $34/ line-month on top of that they are receiving revenue from SBC ? Even if COVD were to provision on average half-million lines over the next 6 years( a huge,huge stretch!) then they would receive over $16/line-month from SBC. So they charge $40 to the customer and get $10 (net) from SBC. This looks like a very sweet deal for COVD. If SBC is buying the lines from COVD, then they must definitely be in control of the content. SBC gets to sells VoDSL,VoD, Interactive services, etc.. Secondly, they get a nationwide network. Thus, they can provide content across the whole country. SBC looks like it wants to become the AOL of DSL. They want to provide: 1. Multiple lines over DSL 2. Long Distance over the same lines 3. DSL connection 4. ISP/Email/Web Hosting 5. Video on Demand 6. Other interactive services yet to come. This is the only reason I can see why they did this deal, its great for COVD. It may be very great for SBC if in fact they do control content over the copper. SBC is looking more and more like an AOL w/ AOL like valuations... hummmmmm.... So where is WSTL? My guess that in the short-term, COVD may start using more WSTL. I have to believe that SBC will tell them if you want fewer problems use WSTL. COVD doesn't do a lot of ADSL and may switch into WSTL as part of the working arrangements. In the long run, WSTL has to come up w/ the IADs to do VoDSL,VoD, and home networking. True, some large portion will remain a straight ISP connection into a single PC, but you have to belive that SBC is really looking at keeping the voice customer and getting in the the high margin broadband services. Time for WSTL to take the arrows out their backs and start shooting some of their own!