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Technology Stocks : GX Investors Thread -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (116)	8/23/2001 10:50:44 PM
From: David C. Burns	Respond to of 586

My 2B$ guestimate is simply based on an average 5 year depreciation time (linear) for 11B$ on assets. The ranges that GX gives for equipment are to wide (2-30 years) to estimate the depreciation rate of GX's assets. I'd guess that a router is virtually worthless after 2-3 years, but that fiber in the ground can be used 10-15 years. Robert Sheldon's estimate of 1B$ would imply a linear depreciation time of 11 years. This sounds very long to me - who knows where fiber optics technology will be in 11 years? I believe a rule of thumb is that the equipment to light up and operate fiber (in the ground or under the sea) is about 100x the cost of the fiber, so my first order estimate would say a higher number than linear depreciation is likely to be closer to the mark.

To: Spekulatius who wrote (116)	8/23/2001 11:16:03 PM
From: Ally	Respond to of 586

>My 2B$ guestimate is simply based on an average 5 year depreciation time (linear) for 11B$ on assets. The ranges that GX gives for equipment are to wide (2-30 years) to estimate the depreciation rate of GX's assets. I'd guess that a router is virtually worthless after 2-3 years, but that fiber in the ground can be used 10-15 years. Robert Sheldon's estimate of 1B$ would imply a linear depreciation time of 11 years. This sounds very long to me - who knows where fiber optics technology will be in 11 years?< Just based on 10K information, GX estimates useful life of the transmission equipment to be in the range of 7 to 25 years. Total cost of transmission equipment around $7B, so based on depreciation method of estimation, maximum maintenance capex would be $1B. $2B for maintenance appears too high. Next year's capex is $2B and that includes new installations. As for keeping up to nuff, how essential is it to upgrade with the latest optical gadgetry? Many of such technical questions would have to be answered by the engineers and operational staff of the network itself. Hopefully when GX firms up next year's capex budget, it'll be broken down into (a)repairs and maintenance (b) upgrades of existing network (c) new installations. p.s. Robert pm and said that his estimate of $1B is based on talking to the company and internal work (I thought so... wouldn't just be based on depreciation schedules). Also said that while he won't be posting, he would still be providing the financial numbers when they are completed.

To: Spekulatius who wrote (116)	8/23/2001 11:22:38 PM
From: terridex	Read Replies (1) \| Respond to of 586

Dear Sir, Since I think the growth rate of this company is the is the answer to the future of this company, your statement "Robert Sheldon's estimate of 1B$ would imply a linear depreciation time of 11 years. This sounds very long to me - who knows where fiber optics technology will be in 11 years? " begs the question, Will the large Telcos who have bought several hundred gig of undersea bandwidth from GX need to keep buying? If you think that their 25 year IRUs are obsolesing quicker than 11 years, will they buy more and more modern services ( mpls enabled services, gprs and umts transport, etc.). Another question: What percentage of undersea IRUs were sold worldwide in the first half of the year by the various players? We no GX did at least $1.1B (sub sea % ?). Tycom? (35M) Level3?( 50M) Flag?( 400M - - sub sea %?) GX needs to grow at 5% on average qrt.to qrt. to get to 2.8 B adj EBIDTA (2 B Capex 800M interest) to be cash flow positive in 2003 for the full year. Will they or won't they? T