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To: HiSpeed who wrote (10530)	11/12/1998 4:09:00 PM
From: nelli	Read Replies (2) \| Respond to of 119973

more briefing.com on AVCO saw it at 7, saw it at 10... now at 30...DARN! I'm just not a believer in DSL! AVTEL COMMUNICATIONS INC. (AVCO) 7 1/4 +5. Shares of this provider of broadband network services are getting a major lift today, rising more than 222% as the company unveiled its DSLink Service which can provide Internet access up to 50 times faster than conventional modems. Actually, the stock had been up considerably more to $10 1/2 (+367%) before experiencing some profit taking at midday. Still, despite the impressive price gains, volume in this stock has been on the light side, trading only 380,000 shares. News that this Internet service provider will provide high-speed Internet access over Asymmetric Digital Subscriber Line (ADSL) triggered the stock rise. The company plans to offer the service for $30 a month, and while the ADSL access is currently limited to the central coast of California, what investors should pay attention to is whether this new service will allow AvTel to make money. After all, this is a $50 mln company generating losses of $0.60 or more per year. In the quarter ended in September, AvTel lost $0.13 a share on revenues of $10.6 mln. While the company is attempting to focus on higher-margin, lower churn business groups, it has yet to prove that it can grow revenues and profits on a consistent basis. Investors are hoping that this new DSLink Service will be the answer. However, given its size and position in the marketplace, AvTel will have a tough time generating the sufficient enrollment growth to justify its current price of $30 per month without reducing expenses significantly. AvTel is still a niche player that needs a substantially larger subscriber base in order to secure better economies of scale and margins. While margins have improved in its targeted group segment, they are still insufficient to allow the company to turn a profit.