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

To: SteveG who wrote (8517)	12/21/1997 10:48:00 PM
From: bill c.	Read Replies (1) \| Respond to of 21342

SteveG: >> This is not the FIRST recent report which views ADSL slowing and cable modems jumping ahead. << I've read a number of reports that say the exact opposite. So who is telling the true? The group that has 10% coverage or the group that has 60-70% coverage? If the RBOC's believe cable as a threat, they will deploy ADSL. >> Again, Bill, with HFC - they are doing it now - and doing it in the high pop urban areas and more well-to-do rural areas where the greatest bandwidth demand is. << 10% coverage today. When will it reach 15%? Will they be at 15% by the end of 1998? I can claim the same thing. When the sH@t hits the fan come mid-98, cable will still be at 10%-15% coverage.... ...Flynn Nogueria, director of data services for GTE Communications Corp., said, "I can't ever remember a new product being better positioned (for mass market penetration)....My 81-year old grandmothers wants ADSL (fast access for her new WebTV)." GTE recently announced limited commercial deployment of ADSL services within office buildings and apartment and condominium complexes. The carrier plans to convert its four ADSL trials to commercial service during the first quarter of 1998. Alan White, project manager with BellSouth's advanced networking division, reported that the carrier will deploy commercial ADSLservices in its top six metropolitan area markets during the second quarter of 1998, with a total of 30 metro areas to be served by year-end. "Customers want this service desperately," he added. Frank Nelson, director of DSL product management for Bell Atlantic, said that his company will begin commercial deployment in mid-1998. SBC Communications also plans mid-year ADSL deployment, reported Mike Powell, the company's DSL marketing manager. Daniel Briere, President of TeleChoice, a leading telecommunications market research firm, predicted an ADSL ramp-up in 1998 with "real mass orders" coming during 1999. "I'm a firm believer that ADSL is here to stay and is a logical way to get high bandwidth to residential and some business subscribers," he said... adsl.com >> In the meantime, they can provide higher speed downstream with existing coax, and an upstream with the phoneline that is being used for a modem now. << Here is a good solution... use the existing phone lines. >> Why test every line? Because they can't sell something that they can't deliver. And they don't know if ADSL will work on your line, even if it works on your neighbor's. << What are you talking about? Bell Atlantic will market 1.5Mbps service. 70% of the lines support ADSL, no testing of the lines needed.... period. 30% will have problems.. some which will not support ADSL. You want to first test all 40 million lines then deploy... and I would say, hook up a RADSL modems, if they works "'70% of the time" great, if it doesn't, find the problem. If you can't fix it, provide ISND. I don't agree with your line of thinking on how BA is going to market it's RADSL service. Where does it say BA will provide 100% ADSL service in it's region? I've never seen that indicated anywhere. We really disagree on BA's marketing. >> And as we have discussed, in addition to Bill's billions, the revenue generated from more cable CHANNELS (people ARE paying) as well as new revenue from cable modems, will continue the buildout << This is going to take BILLIONS and many years to get to 60% coverage. The Telco's will have those area's locked up. >> Are you sure about this? If it's ILEC local copper, it seems they would get access, << CLEC's don't have DLC access today. I think an Alcatel rep. made this comment. >> In the few neighborhoods where bandwidth drops below 1.5Mbps, a cable could (at least Cox does) simply add another line. << What does "add another line" mean? >> This doesn't address any impedance coils that are in 3-6K ft increments from the CPE to DLC. And it doesn't address bridge taps. And it doesn't address bad wire from CPE to DLC. And it doesn't address the CPE wiring rat nest. And I doubt most telcos are gonna DLC their entire plant. << CAP and DMT both work with bridge taps. Bell Atlantic will have 90% coverage. Are you telling me an HFC plant doesn't have to worry about from the CPE to the sub-station? All the house hold cabling works... as is? >> I don't know. How many dollars DOES it take? What does a Lightspan 2000 go for? << I'll use your answer on HFC deployments... Again, Bill, with HFC - they are doing it now - and doing it in the high pop urban areas and more well-to-do rural areas where the greatest bandwidth demand is. Again, Steve, with DLC - they are doing it now - and doing it in the high pop urban areas and more well-to-do rural areas where the greatest bandwidth demand is... .. BA's deployment of Litespans is accelerating in areas where DSL deployment is concentrated initially. Litespans will be located remotely as well as in central offices. Bell Atlantic has a separate contract with DSC for the upgrade of outside plant copper plant to DLCs -- and this could be increased by this DSL action.... telechoice.com

To: SteveG who wrote (8517)	12/21/1997 11:21:00 PM
From: bill c.	Read Replies (3) \| Respond to of 21342

SteveG: >> That's a total of 1MM WSTL lines from now until 2002 - this would yield a growth rate of about 35% (150K in 98, 200K more in 99, 275K more in 00, and 370K more in 01). Competitively at, say, $400/line. With 20% pretax margins - yielding approx $40/line after tax. So we may see $6MM (or .40/share) in profits in 98 (providing no other costs/charges), with a 35% growth rate. This would justify a WSTL price of $14 sometime in 98. And THIS is optimistic. First Call consensus estimates are actually for a loss in '98 of <.57> and a gain in '99 of .06. << I'll start by saying, I beleive Forward concepts is WAY off. I can see the BA deal generating 1,000,000 lines by 2002. ...The implications of this service -- relieving Internet access congestion and providing a new revenue-generating service -- could lead to some big numbers for Bell Atlantic. When you look at the number of access lines in the combined Bell Atlantic/NYNEX territory -- almost 40 million access lines -- one can imagine the market opportunity represented by ADSL. You can easily get to a deployment set of 500,000 lines to 1,000,000 lines within the four year period with decent pricing and a substantial take-up rate among users... Where did you get the $400/line cost. The Bell Atlantic deal is in the range of $500-$600/line. That will have to be split between DSC and Westell, so, $275/line for Westell. Westell doesn't have the cost for the line cards, DSC will manufacture those.. + the cost of rewiring for the DLC solution is DSC's problem. Then you can take revenue from the GTE Gov. Srv, GTE CLEC + 3 unannounced contracts + all those other Canadian contracts + add the revenue that Lucent will generate by selling the Westell solution world wide + revenue from HDSL sales.... until later. >> Competitively at, say, $400/line. With 20% pretax margins - yielding approx $40/line after tax. << Can you provide the math on this one? $40/line for a profit of 10%? Why am I getting $80/line after tax?