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Technology Stocks : Sirius Satellite Radio (SIRI) -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (5958)	1/19/2007 11:26:49 AM
From: pcstel	Read Replies (1) \| Respond to of 8420

There are a lot of assumptions in that short post. Kind of scary when you look at it like that? Isn't it? But, that's the way popsicle stands run. Well, the assumptions are based on current management provided metrics. Don't forget. The CHURN numbers will likely go up. You see.. They are backfeeding the CHURN metrics. Here is how it works. They calculate current CHURN metrics based on current deactivations as a percentage of current net subscribers. So when you are in a period of rapid growth, the net subscribers number increases quickly, providing a higher number to divide away the deactivations. However, the amount of deactivations that are comong out of the pipe are subscribers that were added at a much lower net subscriber level. It currently takes about two quarters for a subscriber that deactivated to show up in the CHURN metrics.. After all.. they keep them on the roles as the "retention dept." attempts to re-sign them up. So these deactivations were actually acquired as net adds over 1 million net adds earler. So if you were to base CHURN metrics against the number of net subscribers a couple of quarters back... Those CHURN numbers would be much higher. As net add growth declines.. The deactivation rate catches up with the Net Subscriber levels and the delta decreases and the CHURN percentages increase. LOL! If you didn't like that number.. Attempt to Calculate how many net adds are needed to overcome that 300 Million in CPGA Expenses that will be spent just to maintain net subscriber growth at ZERO. And so it goes, PCSTEL