Forum Archive Index - April 2004

["Cristine Kerr" <criskerr@optusnet.com.au>]

Hi David,

 

Thanks for your mail.

 

1) Would have to research the tech aspect of this one, however; the major appeal is in regional/under-serviced regions and need/acceptance has already been established - evidenced through contracts to-date. Living in cities, we are used to over-servicing. However; a percentage of the world's population does in fact live and work outside of cities and sometimes we forget just how many are under-serviced.

 

2) The 'glut' is in anticipation of demand. Uptake is growing each year. A provider cannot take advantage of increased demand if they do not have the infrastructure/capacity already in place. Providers who have a 'glut', i.e.; are well-prepared to fulfil a growing need from increased acceptance/adoption are the ones that are well-placed to take advantage.

 

3) 'Only' of interest to US Military.... Hmm, I'm willing to bet there are a number of businesses out there who would be happy to 'settle' for 'only' interest from US Military, however; there are a multitude of additional applications - overseas aid organisations, public services such as education, emergency, govt infrastructure projects (roads etc), mining, medical, transport, shipping, retailers (eg Woolworths), etc, etc, etc, throughout all regional areas of Australia and overseas.

 

4) Extract from MUL profile posted: ' ... Technology Distribution: MTD - For the Jul-Dec'03 period, this segment contributed the majority of revenue. ... ' MTD is an MUL's business line and these results are from early revenue from their Microsoft SPLA licensing. NewSat was only launched in October 2003 and we haven't yet seen the extent of this revenue in a financial report.

 

5) Tech Architecture - I see contracts as sufficient evidence of acceptance/adoption of MUL's technology architecture.

 

Regards,

Cris

----- Original Message -----

From: david.gibson

To: sharechat@sharechat.co.nz

Sent: Thursday, April 01, 2004 7:34 AM

Subject: [sharechat] MUL.ASX - Lets party like its 1999

In establishing a value for MUL.ASX, I suggest the following questions/points need to be taken into account:

 

1)  The technical characteristics of satellite communication are that they offer reasonably high downlink bandwidth at a very high latency.  Modern web applications have modest bandwidth requirements but demand very low latency.  (Applications like video conferencing and VoIP do not need high bandwidth - the 764M requirement in the report is rubbish - they demand constantly available bandwidth (isochronous) and very low latency.

 

2)  The world has a glut of raw bandwidth.  Since the Teleco boom of 1995 and the Dot Com bubble of 1999-2000 - bandwidth infrastructure investment has vastly outstripped demand.

 

3)  Coverage to third world nations or arid deserts is only really of interest to the US Military.  You don't make money with coverage - you make it by having high bandwidth, low latency, WELL SUPPORTED, infrastructure in large metro areas.

 

I have some grave concerns over the revenue forecasts produced in the recently circulated report.  I hope there are other reasons, not disclosed in the report, that support the revenue projections.  My main worry is that the infrastructure being touted is being valued on the basis of bandwidth=$$ - this is not the case.  Look at the difficulties the Southern Cross Cable system is having in selling its high bandwidth, LOW Latency service connected into the US POP!!

 

MUL.ASX have not released enough technolgy architecture detail to be convincing that thy have something special.  If they had an optical fibre story - I'd buy it, at a multiple to NTA of about 2.5 (not 7 as is current).

 

Caution!

 

Disclosure:  does not hold MUL

 

/dbg