Avanti Communications Share Discussion Threads

[marksnsparkle] 11/4/2011 13:38

GaryMott ... yep the dreaded "contention ratio" which means you mostly don't get what you pay for when it comes to connection speeds and hence the favoured phrase of "up to"...

"In the UK, an RADSL (Rate Adaptive Digital Subscriber Line) connection usually has a contention ratio between 20:1 and 50:1 per BT guidelines, meaning that 20 to 50 subscribers, each assigned or sold a bandwidth of "up to" 8 Mbit/s for instance, may be sharing 8 Mbit/s of uplink bandwidth."

[garymott] 11/4/2011 13:16

I feel like I'm wasting my time replying!

Another huge oversimplification in post 5063 is that it assumes that every consumer broadband connection is running at the MAXIMUM download speed specified for 100% of the time (and that the ISPs don't oversell by a b/s their available bandwidth). Mine never does at my home in the UK! ISPs slow the speed significantly when their network's capacity is overloaded.

Using 'up to' speeds in these comparisons of cost v capacity is almost meaningless as far as I'm concerned.

You could make more meaningful comparisons if the industry used minimum speeds or a range of speeds but most don't unlike here in Sweden where I have 12Mb/s - 24Mb/s download range; it's always greater than 12Mb/s and usually about 18Mb/s!

[greengiant] 11/4/2011 12:05

Good luck to you then Simon, I stand by the Board who said the following less than 1 month ago:

Avanti has announced a steady flow of contract wins in the last two years which underpins our confidence in fully utilising our satellites at attractive prices

Special note to the Attractive prices.

gg

[blackberrydrop] 11/4/2011 12:03

Cawkwell gets his maths wrong again! Do you do it deliberately Cawkwell or can you really not add up?

By your own informants calculations, a GM of half of E24.90 on a million subs would earn AVN Euro149m pa, if all they were doing was consumer broadband, which they are not. They can actually make more money on military and enterprise business so its better than that!

[simon cawkwell] 11/4/2011 11:58

Gentlemen,

My informant has again responded:

"Unfortunately I don't think I can say any more on the record about the 3 contract – they do have a free phone number if any of the other posters want to actually check out facts for themselves. I am not suggesting 3 did not sign a contract with Avanti in 2009, but from what I have learned it seems that this was never fulfilled or was cancelled. I wouldn't have mentioned if I didn't already know how many satellite broadband customers 3 under the NBS has and how many of these are supplied via Avanti (the latter is a very round number). Perhaps Avanti would be kind enough to confirm publicly the details of their current relationship with 3?

On pricing, I was only noting how aggressive Eutelsat resellers are being at the moment which will make it hard for Avanti resellers to acquire customers. Even at the post promotion rate of EUR 49.90 a month retail for a 10mb service the numbers do not look good for Avanti – they are close to what I originally estimated (it works out at about GBP 17.50 a month wholesale). Given Avanti state they can serve at most 1m customers at 2mb, it is unlikely they can serve many more than 200,000 at 10mb. The implied revenue level would then be GBP 42m i.e. even worse, because a five times faster service doesn't sell for five times the price."

So I stand by my informant.

Simon Cawkwell

[greengiant] 11/4/2011 11:09

And that is for the

Download bandwidth up to 1,500 kbit/s

gg

[greengiant] 11/4/2011 11:07

PMSL, Simon,

Which part of

9.90 €
from Jan 1st 2012 onward 24.90 €

Does your informant not understand.

Let me make it simple for him,

They are offering a cheap price then it goes back to the standard, and if your informant bothered to read past the big circle, he would have realised this.

He really is quite dense isn't he

gg

[yorgi] 11/4/2011 11:03

Don't waste your time Geheimnis, desperation comes to mind.

[geheimnis2] 11/4/2011 11:01

Simon Cawkwell

This is getting a little dull now, isn't it.

Your informant has already been proven wrong on each and every matter.

Give it a rest.

[simon cawkwell] 11/4/2011 10:55

My informant now comments:

"Simon

In the interest of fairness I should also point out that I was wrong about the level of price competition Avanti could expect from Eutelsat once ka-sat was operational. Back in January I noted:

"Eutelsat offer a 3.6mb service from existing capacity (on satellites that primarily provide TV signals). The wholesale price for this is EUR 17 a month (i.e. roughly the same as Avanti's business plan for a 2mb service). Eutelsat's business plan, having launched ka-sat at the end of last year, is to offer a 10mb service at the same price point."

skyDSL, a reseller of Eutelsat Tooway service, is now advertising a 10mb service at EUR 19.90 retail, incl. VAT, which implies a wholesale price of about EUR 8.50 i.e. half the level I was expecting. Their 1.5mb service retails at EUR 9.90 i.e. less than EUR 5 wholesale. These retail prices cover most of Western Europe and are available (for anyone who can be bothered to verify them) on the skyDSL website (link below):



If we take Avanti's word for it that Hylas 1 and 2 combined can serve at most 1m broadband customers with a 2mb service (see, for example, p.13 of their 2009 annual report) and assume that they price the service competitively (how else will they get customers?) this implies the two satellites could generate revenue of about GBP 60m p.a., less than half the level of management guidance."

It just gets worse and worse for AVN's share price outlook - does it not?

Simon Cawkwell

[blackberrydrop] 11/4/2011 10:54

Excellent post Geheimnis2.

It looks like a quote form an Irish government minister on there being two non-exclusive contracts, one of them being with Avanti, rather clears that up!



Now that HYLAS 1 is up and running they'll hopefully start getting people on to it.

[yorgi] 11/4/2011 10:44

Gentlemen,

I suggest you all ignore someone who is quite obviously badly informed with an informant who has one agenda and the other who is trying to prove he is right and TW is wrong. He clearly has no idea.

[geheimnis2] 11/4/2011 10:39

Cawky

Was Deputy Eamon Ryan lying to parliament, then?

[meljohn] 11/4/2011 10:38

Sorry, SC, but your informant is sounding less and less credible as time goes on ...

[simon cawkwell] 11/4/2011 10:35

Gentlemen,

My informant, spurred by greengiant's rebuttals, now comments:

"We have contacted 3 Ireland ( for information on this service. They confirmed that they only use Satellite Broadband Ireland to supply broadband via satellite under the NBS scheme. The logical conclusion is that there is no contract between 3 and Avanti."

Simon Cawkwell

[geheimnis2] 11/4/2011 10:29

Cawky - give it a rest.

this is a transcript from a parliamentary question on 25 November 2009:

39. Deputy Joan Burton asked the Minister for Communications, Energy and Natural Resources if he will comment on the reported deal between companies (details supplied) for satellite services; the number of households he expects to be provided with satellite broadband; if this number has changed since the announcement of the national broadband scheme; and if he will make a statement on the matter. [43362/09]

Deputy Eamon Ryan: The national broadband scheme contract guarantees that broadband connectivity will be available to all of the buildings within the NBS coverage areas. In recognition of the fact that some areas will be very costly and technologically challenging to reach using standard infrastructure, a limited number of residences and businesses in the NBS coverage area might be covered by a satellite service.

The NBS contract defines specific thresholds and circumstances under which satellite can be deployed and allows for a maximum of 8% of residences and businesses to be served utilising satellite technology. 3 Ireland anticipates the actual deployment of satellite will be approximately 5% of residences and businesses within the NBS coverage area. It is a matter for the NBS service provider, 3 Ireland, to decide where a satellite solution will be deployed, provided that the overall number of residences and businesses served by satellite does not exceed thresholds defined at a county level and for the NBS as a whole. As a commercial matter, 3 Ireland has entered into a contract with two satellite providers on a non-exclusive basis for the provision of the NBS satellite service. I understand that Avanti is one of these companies."

Shall we move on now, then?

;-)

[greyseal] 11/4/2011 10:27

I think that it's time that the BOD step forward and eliminate all of these accusations by SC's informant once and for all and do so positively and not by buying more shares.

[meljohn] 11/4/2011 09:40

Is there any reason to suggest that these two contracts are mutually exclusive?

[simon cawkwell] 11/4/2011 09:16

greengiant,

I put your points to my informant. He replies as follows:

"If this commenter (i.e. greengiant) bothered to read up on the National Broadband Scheme (link here he would see that contractually the other 95% he refers to must be supplied by mobile broadband, a substitute technology to satellite – that was the whole point of the scheme, to build out a national mobile broadband network covering rural Ireland. Of the 5% (11,750 maximum) that may be provided by satellite under the NBS, as I understand it the contract from 3 is exclusive with SBI i.e. none will go to Avanti – which is a lot less than the 5-6,000 initial take up they announced. And please note this 5% is a maximum. Obviously it is in 3's commercial interest to supply as many customers as they can directly by mobile broadband rather than subcontracting out to satellite broadband providers."

Would you care to reply?

Simon Cawkwell

[greengiant] 11/4/2011 08:46

Which relates to around 11,000 homes. Whereas 5k - 6k homes for Avanti. Which still means that Avanti or eutelsat have a remaining target market of around 205k homes. This is massively positive news and shows the extent of the problem and shows the remainder of the market that Avanti has to go after.

So if 6k homes is worth £4.6m over 3 years, then the remaining 200k must be worth around £153m over 3 years

Thanks Simon for the positive news

gg

[simon cawkwell] 11/4/2011 08:33

Gentlemen,

My informant has this morning contacted me as below. He says that the AVN story is getting better but I think it's getting worse. Either way AVN is going down:

"The Avanti story keeps getting better. From what I understand the EUR 5.3m contract with 3 Ireland announced by Avanti for their Hylas 1 satellite in April 2009, which is one of the largest (apparently) firm contracts they have reported for that satellite, was in fact awarded to a competitor (Satellite Broadband Ireland, a reseller of Eutelsat's Tooway service) in October 2009.

The relevant press releases are here:



And here:



Simon Cawkwell

[yorgi] 08/4/2011 14:39

It does seem to move in mysterious ways at times Pojscott that's for sure.

[pojscott] 08/4/2011 14:20

I must say--this is the strangest share I have ever held! Good news tends to send the share price down--directors buying tends to send the share price down--today many more sellers than buyers sending the share price up ????????