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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: jim detwiler who wrote (34015)	2/9/1998 10:12:00 AM
From: IncredibleHult	Respond to of 61433

Here is some of an IB's report on ASND today. ú Evidence that ATM is being and will be deployed as a core technology in most major carrier networks continues to mount. Whether the carriers offer native ATM services or not, they are deploying ATM in the core as a high-speed transport because ATM is currently the only technology that can seamlessly carry any kind of digital traffic (voice, video, and data-particularly Frame Relay and IP) For this reason, we believe there is little doubt that wide-area ATM will be one of the fastest growing sub-segments in the networking industry as carriers begin the deployment of next-generation broadband ATM networks. ú Into this market, Ascend's CBX 500 and GX 550 wide-area ATM switches have truly emerged as "killer products" within the carrier customer base. While the CBX 500 is a core switch in its own right, the GX 550 offers such a high density of OC12 and OC48 links that carriers who deploy the 550 often use the 500 as a fan out or edge switch. The combination of these two products' scalability, density, and feature sets is extremely attractive to carriers. ú We have contacted several carriers who are in the process of developing and deploying their next-generation networks and have found that nearly all of the carriers we have spoken to are designing ATM into the core of their networks. In the process, these carriers are purchasing and deploying large numbers of 500's and 550's to build these networks. Ascend has key wins at Bell Atlantic, AT&T, Brooks Fiber and Williams Communications. ú Williams communications recently announced plans to purchase $150 million worth of ATM switches from Ascend. While this was a big win from Ascend's perspective, we believe that Williams could take significantly more than the announced order. Keep in mind that we only have $380 million in revenues from ATM switching modeled for Ascend in 1998. ú Ascend also has a product line inherited from Cascade's Sahara acquisition that compliments the core switching effort with a high-end multiservice ATM switch. This product has just begun shipping and has the potential to add to revenues in the second half of 1998. Given our expectations, our current estimates are probably too low. While we expect Ascend will have a strong second half in 1998 we feel the first half of the year may be tempered by the increasing seasonality seen in the networking. As such our estimates will remain conservative given our enthusiasm for this space and Ascend in particular.