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Technology Stocks : Broadband Wireless Access [WCII, NXLK, WCOM, satellite..] -- Ignore unavailable to you. Want to Upgrade?

To: Obewon who wrote (156)	5/7/1999 12:52:00 AM
From: SteveG	Read Replies (1) \| Respond to of 1860

Thanks Obewon- Your report seems consistent with my understanding of where ARTT is. We know they run out of $$ in June, and that appropraitely they are hunkering down and not building any further IMO, Hirsch is cutting it REAL close. He may be playing for some "optimum" arrangement, when in fact he doesn't have the luxury or leverage of time in his corner - and his negotiating counterparts KNOW that very well. My concern as I've said before is that he doesn't have anything great to bring to shareholders, and any partial purchase arrangement may not get a higher valuation than ARTT now trades - why SHOULD someone pay up when ARTT is DEAD without them? I hope I'm wrong as I am long calls and stand to make a lot of money if the stock moves up (at least at THIS time), but these are my concerns at the 11th hour with a CEO I don't think is very sophisticated in dealing with the street OR in high level business negotiations.

To: Obewon who wrote (156)	5/7/1999 12:55:00 AM
From: SteveG	Read Replies (1) \| Respond to of 1860

WCII: Focused On-Net Growth In 1Q 1999 Bankers Trust Research/BT Alex. Brown Research Bo Fifer,Jeffrey Hines May 06, 1999 ---------------------------------------------------------------------- WINSTAR COMMUNICATIONS INC. [WCII] "STRONG BUY" Focused On-Net Growth In 1Q 1999 ---------------------------------------------------------------------- Date: 05/06/1999 EPS 1998A 1999E 2000E Price: 45.38 1Q (2.54) (3.74) NE 52-Wk Range: 55 - 10 2Q (2.77) (4.02) NE Ann Dividend: 0.0 3Q (2.83) (3.61) NE Ann Div Yld: 0.00% 4Q (3.80) (3.55) NE Mkt Cap (mm): 3,490 FY(Dec.) (11.96)A (14.92) (10.80) 3-Yr Growth: FY P/EPS NM NM NM CY EPS (11.96) (14.92) (10.80) Est. Changed Yes CY P/EPS NM NM NM --------------------------------------------------------------------------- ---- HIGHLIGHTS: -- WinStar reported exceptional access line growth in 1Q 1999 last night (6-May) just before the market's close. -- POSITIVE NEW NEWS: WinStar outpaced our model by every measure reported. While the absolute number of lines added beat our estimates, what really impressed us was the mix of lines added in the quarter: Metric 1Q99E 1Q99A 1Q98A Access lines (Mil.) 0.379 0.384 0.145 % On-Net 22% 24% 15% % On-Switch 39% 45% 30% % Resale 39% 31% 55% Net Lines Add's (Mil.) 0.060 0.065 0.045 % On-Net 31% 44% NE Source: Company data, BT Alex. Brown Incorporated estimates. -- STOCK PRICE PERFORMANCE: YTD, WCII is up 16% versus a 55% gain in our CLEC Index and an 8% gain in the S&P 500. -- NET-NET: Behind the outstanding access line performance was the success of WinStar's Millennium project, which was designed to drive penetration of on-net buildings. WinStar has reached an average penetration of 14% in Millennium buildings (versus a long-term goal of 10%) doubled its rate of first-visit sales. -- VALUATION: Based on our 10-year DCF, using a 20% equity discount rate and a 10x terminating multiple, our 12-month price objective on WCII is $63/share. Maintain "strong buy (1)" rating. We believe WinStar currently represents the best risk-adjusted return profile in the fixed wireless industry. DETAILS: WinStar reported exceptional access line growth in 1Q 1999 last night (6- May) just before the market's close. WinStar outpaced our model by every measure reported. While the absolute number of lines added beat our estimates, what really impressed us was the mix of lines added in the quarter: Metric 1Q99E 1Q99A 1Q98A Access lines (Mil.) 0.379 0.384 0.145 % On-Net 22% 24% 15% % On-Switch 39% 45% 30% % Resale 39% 31% 55% Net Lines Add's (Mil.) 0.060 0.065 0.045 % On-Net 31% 44% NE Source: Company data, BT Alex. Brown Incorporated estimates. As of 1Q 1999, WinStar's access line breakdown was as follows: Lines in Millions 1Q 99 4Q 98 On-Net Lines 0.092 0.064 On Switch Lines 0.172 0.144 Data Lines 0.096 0.080 Voice Lines 0.077 0.064 Resale Lines 0.119 0.112 Total Lines 0.384 0.319 Source: Company data, BT Alex. Brown Incorporated estimates. On-net lines consist of voice lines (and a small amount of fax or fractional T1s that are allocated partially to voice and partially to data) that reach the WinStar switch via a wireless last-mile connection. On- switch voice lines are leased local loops routed back to WinStar's switch. On-switch data lines are leased local loops connected to WinStar's switch, and going through WinStar's Internet POPs--frame relay or ATM--to the Internet, and therefore are also very high margin lines. Resale lines are provisioned by the ILEC and purchased by WinStar at wholesale rates. Thank You, Project Millennium Behind the outstanding access line performance was the success of WinStar's Millennium project, which was designed to drive penetration of on-net buildings. Millennium customers receive up to one year of free local service by signing a three year contract with WinStar. Thanks in (large) part to this marketing program, WinStar has achieved several impressive milestones in 1Q 99: -- WinStar reached an average penetration of 14% in Millennium buildings (versus a long-term goal of 10%) -- WinStar doubled its rate of first-visit sales to 19% from 7% sequentially -- 60% of new customers signed three year contracts -- 60% of new lines were for multiple services