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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Frank Byers who wrote (6172)	8/26/1998 1:41:00 AM
From: Gary Korn	Respond to of 18016

I would advise against building in any LMDS revenues, except for some trials and small deployments Frank, I may be mistaken, but I thought the $900MM in contracts announced last week were LMDS-related. If so, that would seem to be more than trials and small deployments. But then, I'm not sure the contracts were so related. Perhaps someone can clarify. Gary Korn

To: Frank Byers who wrote (6172)	8/26/1998 2:59:00 AM
From: pat mudge	Respond to of 18016

Frank -- Many of your points are well-taken. LMDS is unproven and NN is not banking on it as a major part of their overall product base, at least that's not the message I heard. What I heard is that LMDS will fill in a gap in their multiple-service offerings, allowing customers to reach subscribers in specific areas that couldn't be reached any other way. You're right to say until there are solid deployments at the other end, no one will be able to take the money to the bank. I would add NN did ship product at the end of Q1 and that means revenues, so no one can complain. Remember, too, analysts haven't factored LMDS into their models yet, so it's not as though they've decided it's not a good market and they'll have to lower earnings. Quite the opposite. As for the technical limitations, I'd have been far more skeptical had I not had dinner with a TI engineer and had him explain the importance of wireless in augmenting VDSL deployment. He said BT and FT are both extremely excited about the units they've trialed so far. Looking at the strength of NN's other products, I don't think we have to either over play or under play their LMDS. There was growth in every market segment, geographically and in product groups. BtoB was more than 1 in both ATM and TDM. They have a record backlog in the 170, and are shipping everything they can bring out. When asked about WAN packet growth, Ken Wiggelsworth said he was more comfortable with this quarter's $183 million than former quarters' revs of $130 to 150 million. TM then explained the strength of the DSL products. "They will impact revenues ongoing," he said. Frankly, if I were going to back a farm team, I'd choose DSL I suspect there will be significant contracts over the next six to 9 months that will far exceed LMDS. That's me speaking, not the company. TM merely said it "will impact earnings ongoing." The highlight of the conference was the SBC announcement. NN's planted its flag in the US carrier market. Combined, SBC and Ameritech will control 1/3 of all US phone lines and Alan said the contract included most of NN's portfolio of products. In my estimation, NN's not completely out of the woods but it's turned a corner and has the right management team in place to take what strengths they have and run with them. Their MainStreet products are like that Nairobi marathon runner who seemingly couldn't be stopped. The other products are like a relay race where one runner carries the baton for a stretch and then passes it to another. The coach assesses their strengths and decides who's worth currying and who's not. Those who are will be trained for longer races. I think we agree on the potential challenges LMDS is facing. I hope we agree NN has far more going for it and will not sink or swim on this one technology. Once it gets going, I'm counting on DSL passing LMDS like it's standing still. But then I'm biased. Night --- Pat

To: Frank Byers who wrote (6172)	8/26/1998 10:21:00 AM
From: John Djzuba	Respond to of 18016

Regarding LMDS : those familiar with LMDS know quite well that it suffers from propagation and deployment problems. Over the last year the North American market focus for LMDS has narrowed and does not so much include the individual home user, but more the small business office, the SOHO , the small building office occupant, etc, that require high speed access in excess of several megabits per second. ADSL and cable modem cannot often provide such rates with bi-directionality.... often ADSL does not have better than 60-80% coverage in many core urban areas due to antiquated cable plant. Also, do not forget that in most countries of the world, outside North America, wire telephone lines and coax cable plant are either non-existent or of such poor quality so the only option for these countries is to use an RF technology to deliver high speed multipoint data... LMCS will fit the bill in many cases. The ATM technology solutions that Newbridge is pursueing are RF spectrum independent.....so we may see the same technology applied at, for instance, 5.2-5.8 GHz(rather than 28 Ghz where LMDS resides)......my only problem with the Newbridges' high speed wireless solutions is that they are doomed in the long run....gigabit ethernet switching is simpler to implement, is more video and multimedia friendly, and has commonly available interfaces with the PC. It would be nice to see this company develop some Gigabit Ethernet solutions to complement their ATM portfolio.