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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (1836)	8/7/1998 1:47:00 AM
From: wonk	Respond to of 12823

Frank: Local Multipoint Data Services (LMDS), a broadband wireless technology, will develop into a $6.5-billion market by 2007, ... More than half of US LMDS revenues will be generated by companies with fewer than 10 employees Here are some "back of the napkin" calculations just for fun. I am pulling much of the underlying statistics from memory so please, no one hold me to it. In 1996, local and LD had about $180 billion in revenue. Subtract out about $30 billion in access charges so we don't have a double counting problem, leaves total Local/LD revenues of $150 billion. Assuming a 50/50 split between business and residential revenues, leaves $75 billion from business accounts. I believe in 1996 there were about 110 million employees in the US, so $75 billion divided by 110 million equals $681 of local/LD billing per employee, almost $57 per month. (Low compared to what I remember). In the recent past, LD and local combined have grown revenues at about 5% a year. If we assume that the average telecom billing per employee per month will grow at the same rate, then the telecom billing per employee will be approximately $97 per month in 2007. (57 * 1.05^11). Therefore, the 3.25 billion of LMDS revenues from small business represents approx 2.79 million employees. ($3.25 billion / ($97 month 12) What kind of penetration into the employee base does that represent? Starting from a base of 110 million employees, assume that total employment grows at 3% year which by 2007 would mean 138 million employees (1101.03^11). Therefore, LMDS penetration into the nationwide employee base would only be 2%. Even assuming no residential revenue, penetration of the national employee base only has to be 4% to reach their forecasted LMDS industry revenue target. Since some portion is residential and the $6.5 billion may not be just US revenue, their forecast does not seem unreasonable. ww p.s. Can I charge $4,000 too if I lock down my statistics?