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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: SirRealist who wrote (49959)	3/30/2001 9:39:16 AM
From: Rande Is	Read Replies (4) \| Respond to of 57584

. . . . . Telecoms Are Hardly Dead. . . . . . SirR. and all: the Ravi story had its usual Street.com negative slant. Ravi's argument maintained the assumption that the telecom sector would stay as it is currently or decline. For whatever reason, he failed to bring into account the possibility that it could EXPAND! Or that the properties that are in place could actually appreciate. That is so typical of TSCM to tell half the story. And I am not about to attempt to argue balance sheets and fundamentals with Mr. Suria. I believe that he knows and understands both sides of the coin. . . and I wonder about the parts that were edited out. I would have been surprised if the article was balanced. Is the Good Stuff In Part II? They discuss the COST of 3G but fail to mention the potential revenue stream it would bring. They discuss the potential for bankruptcy until we are tired of reading about it, but fail to mention that a turnaround in the economy could see the stock prices of companies like T and WCOM double, making them less of a risk and probably taking them out of credit watch. I am told that Uunet hiked their prices substantially. This is essentially the cost of running the internet. The Uunet lines are what carry most of the internet from company to company around the world. Uunet is a massive infrastructure of fibre, etc. and is owned by WCOM. The word that I am told from that those in that industry is that nobody balked in the slightest at the rate hike. But the Fromson interview never bothered to ask Mr. Suria about the effects that such a price hike might have on WCOM's bottom line. I would have been shocked to hear such a question. Anyway, Mr. Suria is basing his theory on a projection made that the telecoms sector as a whole would not see positive cash flow until 2004. And I just don't subscribe to this tunnel vision theory. Nobody knows what will happen between now and 2004, it takes plenty of faith to believe any assumption. What Lies Ahead While the dotcoms fail, the advertisers bail and the portals flail, it will be the telecoms that wail. I maintain that the future wealth of the internet remains with the telecoms. My simple-minded reason for this line of thinking is this. . . . when broadband arrives in full force. . .with interactive television and games, movies on demand, music on demand and multi-person conference calling, etc., etc. . . . .and it comes by way of the set-top box sitting in every home. . . including your uncle Lou and your aunt Gladys. . . . . this high-density material will cause a DRAMATIC increase in the demand for bandwidth. . . and it will be so great that there will once again be no balking at the price. So where lets say for instance 5% of money spent on the internet goes to paying bandwidth to the telecom companies. . . with today's videotext version that has been around nearly 20 years now and mostly runs in the under 500k per second range. . . . when the full impact of broadband hits, the average speeds will be closer to 4 Meg. . .and with the rest of the internet costs staying the same, the percentage spent on bandwidth could be 5 to 8 times this amount. The Need For Fat Pipes But the more important number will be bandwidth used per day. Today we download web pages, quotes, and perhaps a snipet or window box clip from a news source. But when we are watching a full screen interactive movie with surround sound, while talking to our long-distance friends. . . and playing interactive live-action full motion games. . . for hours every single day. . . .the demand for bandwidth will not increase by just 5 or 8 fold as in the above illustration. The daily consumption rate could increase by a hundred times or more. And we are talking a wider audience as well. This is not rocket science. It is simple physics and mathematics. So once again, let's not allow others to weaken us and alter our thinking or our reasoning. Let's stay cool and think clearly about what lies ahead and how it may effect certain companies and sectors. Is There Light At the End Of This Tunnel-Vision? And now that I've begun discussing broadband and all it will bring us to enrich our lives. . . .am I once again feeling bullish and beginning to see opportunities? Dare I? WCOM and one of the companies bringing us these broadband services, Liberty Media [LMG.a]. . .were two of the companies [my favorites] we piled into in mid-December at $14 and $9 respectively. I announced I sold my WCOM somewhere around $20 bucks. . .but am looking to re-establish my long-term position in the low teens once again. Liberty Media has held up well throughout all this mess. . .and I am still holding. I guess the bull camp needs some cult-like therapy. Repeat after me, "the future is bright" , "technology is our friend" , "investment banks are my enemy" , "most of what I hear and read is hype" , "the future is bright" , "technology is our. . . . . . . .>g<. . . >jk< Rande Is