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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (10148)	1/10/2001 12:34:02 PM
From: elmatador	Read Replies (1) \| Respond to of 12823

Telephony has roots as Public Service. Public Service was not meant to make money. Telephony is being tied down to the ground as a public service. But if we take this basic service (telephony) is packaged well there is a lot of money to be made. Keep this basic service standing alone it will die. ILECs have chosen the later. It will die. I will give you this excample of Czech ILECs Cesky Telecom. It is the one of the last communist companies here. They did nothing in the last decade. Three GSM operators came. Set up networks and all the good customers are sending their minutes over mobile. It is not like Brazil that sold its fixed operations while the going was good. There is very little you can do wiht those lines here. So you have to subtrac from those worldwide 1 billion copper lines those here in Czech Republic. They are not worth much.

To: MikeM54321 who wrote (10148)	1/10/2001 11:46:41 PM
From: wonk	Read Replies (1) \| Respond to of 12823

Mike: Perhaps I can resolve to your satisfaction whether dial tone is a money maker. The following is from Bell Atlantic's 98 10K. Revenues: Local services $13,113.2 Network access services 7,158.6 Long distance services 2,190.1 Ancillary services 1,845.4 Directory and information services 2,298.0 Wireless services 3,328.5 Other services 260.1 TOTAL OPERATING REVENUES $30,193.9 Employee costs $ 9,047.2 Depreciation and amortization 5,864.4 Taxes other than income 1,606.9 Other operating expenses 8,333.9 Total Operating Expenses $24,852.4 Lets simplify by removing depreciation from operating expense: Total Revenue: 30.2 billion Total Expense: 18.9 billion EBITDA 11.3 billion Subtract out Network Services which at this time was predominately access charges and one is left with EBITDA of $4.1 billion. Now if one does a margin analysis on the other main components of revenue you'll find that LD (Intralata toll), wireless, ancillary, directory are all high margin services. I can't get any more specific w/o the data in from of me. However if we presume they each have EBITDA margins of 50%, subtract out 9.9 billion of revenue and 4.9 billion of expense and we are left with: Revenue: $13.1 billion Expense: 14.0 EBITDA (0.9) billion sec.gov I don't think its really that bad because not all the aforementioned services are driving 50% EBITDA margins but all-in-all its pretty close. Basically that why I said that res dial tone has been a money loser, biz dial tone is profitable, but not greatly so and the money maker was on access charges and other services. This can be confirmed anecdotally by just looking at the former US West. It had the highest percentage of rural lines, rural HH lines, and hence it had the worst profitability not withstanding the pop from other services. From a billing perspective, wireless voice is metered, and wired voice is most often not. Big difference. This is where I diverge from elmatador. Pretty tough - even in wireless - to provide 1200 minutes a month at $25 and make money. I'm not an apologist for the RBOCs but they do have do be given some latitude and respect for the universal service argument. ww p.s. I can't drop by too often nowadays, but just wanted to let some folks know I wasn't dead. :-)