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Technology Stocks : CAWS - Wireless Cable (New and Improved) -- Ignore unavailable to you. Want to Upgrade?

To: Zorro who wrote (5487)	8/3/1998 10:23:00 AM
From: WTC	Respond to of 5812

Zorro, Re: <At a minimum, the new assessment should include a very thorough engineering, legal and marketing analysis. The engineering analysis should include interference studies for ALL channels in each market. The legal analysis should include a complete review of all lease/purchase contracts. The marketing analysis should identify which wireless applications are most likely to succeed in each market and provide the framework for CAI's business plan. > Engineering Analysis: The BTA licenses that CAI holds moot a substantial part of historical co-channel interference concerns, but I would bet a paycheck that the studies and conclusions your associate wants to review are completed already by CAI, and quite professionally so, at that. This is a cumbersome, expensive proposition to complete. There are engineering judgements incorporated in such an analysis, but I would suggest that the CAI engineering department is a strong aspect of the company, and the judgements applied in the analysis are no doubt as good or better than any that could be applied in a due diligence effort. I would not be concerned about the subjectivity. Legal Analysis: This might not be fully up-to-date, but again, I would wager that CAI has a very complete and carefully assembled analysis if their channel portfolio. It is inconceivable to me that any more exhaustive or accurate analysis could be practically assembled as part of a due diligence effort. (I speak from some experience there -- this is endless scut work.) There is very little subjectivity in such analysis -- apart from some necessary guesses as to what happens when specific sub-license agreements expire. Marketing Analysis: This might be the place to put the due diligence attention, after securing and digesting the appropriate analyses completed by CAI. This would clearly need to be built around the marketing, product management, promotion, and sales strategies of the management team in control. Net of my suggestion: your friend might consider what access he/she can get to the internal proprietary analyses completed and updated by CAI in recent years. A company proposing to take a major equity position in CAI would certainly be afforded access to such information, under a non-disclosure agreement. I personally don't know how a Chapter 11 situation affects disclosure of proprietary information. I think the $.75B - $1.0B estimates are very optimistic in the current environment, but the key is what an operator can do with this spectrum. The CAI markets are certainly prime, but the NE USA still has to be considered relatively hostile to 2.5GHz propagation, and therefore, to RF coverage where foliage is a factor (residential.)