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

To: Win-Lose-Draw who wrote (361)	12/18/2005 11:06:40 AM
From: Cooters	Read Replies (1) \| Respond to of 1575

Depends on how you look at it Win. I'd need to see more details, but I believe this is becoming an industry model for Class5 VoIP. But let us assume nothing and simply look at it strictly as a financial instrument. I would not compare it to the traditional vendor debt financing, it looks like vendor equity financing to me. Install the equipment for some amount(we do not know), but share in the largess that follows. And let me remind you the numbers we are talking about are huge. ML estimated the Jupiter win for SONS at $80-$100/sub. Let's take half of that, $45. If Sonus truly owns the Japanese Class5 market and they get $45/sub x 70M subs, we have over $3B coming our way. Now that is some paper I want to own. And that is just the Japanese market. My ownership in Sonus is purely based on the transition from circuit to packet switching, it is the best way I see to play the transition. But I would gladly sell SONS if I could buy an equity instrument that generates an annuity stream from new VoIP Class5 subscribers. Do I now have both, equipment revenues for Class4 and an annuity stream for Class5? Cooters

To: Win-Lose-Draw who wrote (361)	12/18/2005 12:58:17 PM
From: Cooters	Read Replies (1) \| Respond to of 1575

One more big difference between traditional vendor debt financing and the concept(used or not) of more or less giving equipment away in a per subscriber model. The former is booking revenue on financed sales while the latter is not booking revenue on equipment installations. I would consider the per revenue model possibly even more conservative than a normal sell/pay sale, Sonus would be incurring costs but not booking revenue, while the valuable annuity payments would not be reflected anywhere in the financial statements. Man Win, you are making me salivate at this possibility. <vbg> Cooters