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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: Moonray who wrote (24592)	11/17/1998 12:05:00 AM
From: Wigglesworth	Respond to of 45548

Voice over IP and 3Com from the Credit Swiss Army Knife Company: Voice over IP (VoIP) opportunities. On its conference call 3Com cited over $2 billion in potential RFP's for voice over IP equipment, which would mostly be remote access concentrator equipment (3Com's Total Control Hub product) and ATM access equipment. We believe that 3Com could be awarded, a very large, long term contract with AT&T for its domestic voice over IP network deployment (3Com is an incumbent supplier to AT&T of traditional dial up access). We believe 3Com could announce this as early as the InterOp tradeshow in October, but revenue contributions would likely be minimal until mid-1999.This order is very important for four reasons: it is large - we estimate this could generate hundreds of million of dollars over a 2-3 year period as the scale of the deployment is expected to be in the "millions of ports" according to several sources. It is likely this business will be at least partially shared with a secondsource. it is a flagship order - 3Com's access business has been perceived as being a weak sister to Ascend and Cisco (generally recognized as strongest VoIP players), or as lacking the strong relationships that LU has, but this deal could re-ignite 3Com's image as a supplier in this space. With over a dozen RFP's being bid, generating some excitement for 3Com's technology could help secure other business. VoIP should be increasingly important in 1999 - to date the market has been served primarily by small, private, point- product companies: next year all the major vendors - ASND, COMS, CSCO, LU, NT, etc. - will be in the market. Additionally, the market is maturing from a hobbiest/consumer orientation to corporate buyers with strategic motivations, enhancing the opportunity. VoIP adds to the average selling price - whereas ASPs for traditional remote access concentration are about $200- 300/port, adding voice could boost the ASPs to $500/port or more.