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Technology Stocks : PairGain Technologies -- Ignore unavailable to you. Want to Upgrade?

To: Mike McFarland who wrote (27490)	12/5/1998 9:01:00 PM
From: Daniel G. DeBusschere	Respond to of 36349

Yes, I am particularly fond of the HDSL2 opportunity - see Message 6680731

To: Mike McFarland who wrote (27490)	12/7/1998 1:11:00 AM
From: Rainmaker	Read Replies (1) \| Respond to of 36349

<< Can somebody give me sort of an overview of the status of the relationship between Pairgain and these rbocs and clecs (do I even have that right, is it the local carriers which have to do all the equipmentu pgrades--geeze, I only spend $20/month for local service, how can they affort to upgrade their networks?!) I saw something about PAIR and GTE going their separate ways awhile back?>> PAIR has accounts with the following RBOCs for their HDSL plugs: BA, BellSouth, SBC - PacBell/Ameritech amalgamation, and SW Bell). Their business with BA dropped off faster than expected - primary reason for CC Thursday. They are sole source providers to BellSouth. No shift in business at SW Bell. The RFQ for SBC will be awarded in January 99. There will be new opportunities with USWest early 99. PAIR will likely loss some business at BellSouth as they add a second vendor in 99. Frontier is a CLEC (thanks, Lee Allgood). In the 3Q CC, PAIR indicated 20% exposure/penetration with this company. Network upgrades are funded by business users who spend thousands per month for T1/E1 access. With ADSL projected to deliver similar performance at around $50 per month, the RBOCs are extremely reluctant to migrate and give up this lucrative business. This is one of several reasons. CLECs get funding from IPOs. They are more flexible and with a clean sheet of paper, can rollout ADSL immediately. HDSL and ISDN are 10+-year old technology. The CLECs, ILECs, IXNs (independent exchange networks), and ISPs will not likely deploy this dated stuff. The October 26, 1998 edition of FORTUNE featured an article on these new phone companies and talked about their competitive, entrepreneurial edge. You can search for this and gain additional insight. Keep in mind the above relates only to the T1/E1 plugs and not their small subscriber, PG Family, or Avidia. The BA loss was only in the T1/E1 business - THEY MAINTAIN AN ACCOUNT FOR THE OTHER EQUIPMENT. Additionally, a sleeping giant to keep an eye on is Sprint. <<As some of these DSL rollouts get going in major metro areas, who are the top players so far--I get value line, and I have a list of PAIR's competitors...but I'm sure it is not complete.>> All major telecom equipment manufacturers, and emerging ones, are making equipment to deploy xDSL. As the trend shifts to ADSL, look for companies who can provide a "total solution" or "systems-level platform, not just components. PAIR's Avidia is a systems-level platform. <<Finally, does anybody perceive that PAIR has a lead in HDSL2 that will makes it an attractive takeover target?>> The HDSL2 standards were developed as a joint effort among (alphabetically): ADC Telecommunications, ADTRAN, Level One, PairGain, and Siemens. Rockwell and Orckit provided additional support. This standard was finalized in April 97 as ANSI (American National Standards Institute) T1/E14/97-471. Good luck.