Avanti Communications Share Discussion Threads

[marksnsparkle] 02/4/2011 19:28

phoenixbird ... as you will see below Avanti are happy to disclose the industry standard contracted backlog metric

14 February 2011 ....

"The demand for our services is very strong and our pipeline of opportunities continues to grow. The order book (also known as "backlog" in our industry) across the two satellites now totals £229 million with the average length of contracts being 7.2 years for HYLAS 1 and 4.3 years for HYLAS 2. The average prices per MHz per month are materially ahead of expectations. The pipeline of potential new business in negotiation amounts to £389m, not including transactions which are under negotiation to support the efficient debt financing of HYLAS 3.

The contract backlog and pipeline give us high confidence that we can achieve the three and five year sell out targets we set ourselves.

Customers make firm irrevocable commitments to buy a specific amount of bandwidth at fixed prices and duration. In one exception, the order book includes one transaction with an institutional customer structured as an option over which the first instalment payment has been received.

In March 2010 we announced conditional contracts for the sale of 320 Mb of capacity on HYLAS 1 to a customer for service in Eastern Europe, subject to the completion of funding. The funding for this business has been partially achieved and as a result, 186 Mb of this capacity has been purchased firmly. Further customer efforts to secure funding for expansion into new territories are expected to result in the remaining option capacity (not included in the backlog) being taken up."

[marksnsparkle] 02/4/2011 19:23

phoenixbird ... its a red herring ... Avanti has simply changed its reporting method from the previously-used metric of pre-sold capacity to the industry standard contracted backlog

"Avanti has moved from reporting a peak year percentage of pre-sold capacity to the industry standard metric of backlog as used by other public operators. Peak year pre-sold capacity, while indicative, represents anticipated peak utilisation over a number of contracts with varying contract lengths. The industry standard backlog represents contracts signed for services which customers are obliged to pay for."

[yorgi] 02/4/2011 14:28

As Horneblower has pointed out there are lots of areas where land lines, cable, or mobile does not give a much if any service and this is where Hylas1 customer base will come from. I'm quite sure this is no small number and I'm confident there will be more than enough demand to fill Hylas1 before Hylas2 is launched.

I don't think IC have thought it through. Yes AVN is not cheap (the SP) but quality never is and as GG pointed out earlier if it 18 months to 2 year before the share price gets near 2000p level that is still some pretty good return.

[greengiant] 02/4/2011 14:05

Argy, hate to make you feel unwanted but you are not their target market :-)

gg

[horneblower] 02/4/2011 13:07

If you live 7 miles or more from your local exchange the maximum bb speed you can get is 1mbps down the line. Our neighbour across the valley gets a max speed of 0.375mbps. Mobile signal is equally poor - the gauge hovers between nought and 2 bars...but that may be just the iphone, which has a notoriously weak antenna.

[yorgi] 02/4/2011 12:48

I nice part of the world Argy.

[argy2] 02/4/2011 12:37

Outside Wimborne area yorgi

[yorgi] 02/4/2011 12:35

Where abouts Argy, just out of interest, I was born and grew up near Shaftesbury in Dorset ?

[argy2] 02/4/2011 12:28

hornblower

I'm surprised. I live in a rural part of Dorset and can get 2mbps by landline and even good speed via Vodaphone

[waterloo01] 02/4/2011 12:26

Eire = Ireland

[polythene] 02/4/2011 11:54

Whe TF is Eire?

[greengiant] 02/4/2011 11:28

Neverforget,

Thanks for the article, much appreciated. Now let's look at what IC are saying, starting from the back and working forwards.

We question the long term need....

So what they are saying is for 1 element of the article (rural broadband) they don't see any need for satellite communications. In part I agree, however, how long is it before the whole of the UK gets 4g? Currently, the 3G network is strained and with the expansion of smart phones, tablets and our crazy demand for on demand everything, do they really believe that there will be no further need for satellite broadband? Also what about

1) Enterprise Continuity?
2) Cellular Backhaul
3) Government?

Have a read of O2's comments re 4G



To me the simple question is: 3G has been around for a long time and works for all needs now. If teleco's have not all ready connected the rural area's (both fixed and mobile) wht makes people think that all of a suddent they are going to do it?

Also as pointed out by Jimbo, UK is one area, you only need to see Eire to see the same situation now how far behind do people believe Eastern Europe to be? Very poor point by IC in my view.

In terms of the 2,300 share price, well I am comfortable waiting for H3 to come into operation. Why wouldn't I be? It is only 2 years away and a possible 4 - 5x shre price in that time suits me fine, you would be hard pressed to find this anywhere else. People will have been worried by the shareprice drop and would have sold out that is their opinion and so be it. Whilst others who are so much closer to the business (directors and Caledonia) have been buying significant volumes. What does that tell you?

As for the Analyst at Investec, this has been answered time and time again, however, in my opinion, management f'ed up here. You cannot just speak to the analysts that agree with you, you have to speak and persuade those that don't agree with you. The old saying keep you friends close and enemies closer applies here. Their offer to meet a month after the note was released was a bit like trying to close the barn door after the horse had bolted. This has been the first significant mistake by management and I hope they learn from it.

Phoenix, the ED report in the header is good to read, but be aware it is paid for so, read with caution.

As for SC, well his opinion is his opinion. He has been right so far but I believe he will be wrong longer term.

TSmith2, what happened to your bowl?

Have a good weekend all.

gg

[horneblower] 02/4/2011 11:12

In fact about a third of the area in a 60 mile circle surrounding London is STILL an internet desert with sub 2mbps broadband. Probably only about half a million people live in those areas but they are definitely a target audience. The gov has pledged that all areas should have min 2mbps bb. This won't happen soon without satellite.
I live about 50 miles SW of London with large conurbations of people around me. The best bb speed here is 1mbps.

Bring it on pronto.

[jimbo55] 02/4/2011 10:52

phoenixbird, there have been many such discussions on this subject on this bulletin board. The IC are making a mistake by 'seemingly' focusing only on the UK market. Hylas 1 is more about Europe; particularly Eastern Europe, than it is about the UK. In terms of the latter, there are still areas of the UK that have poor access to broadband internet where it may not be practical or legally possible to site a 3g or 4g mast. Cumbria and the Lake District National Park is one, and the Central Highlands of Scotland is another. What this IC author may be failing to realise is that not everybody lives in London......

[garymott] 02/4/2011 10:49

colva, so what you're saying is that anyone who followed Simon Cawkwell long into IPM on 29 March is curently after just 3 days sitting on a paper loss of 73% and then to rub salt into the wounds he has abandoned his followers by saying "No opinion is now offered"! If I had bought IPM upon his recommendation I would be pretty angry with both SC and myself.

I'll be honest, I had not come across SC before until he suddenly appeared on this BB a few months ago with his pronouncement that we was short AVN due to some great insight he had of the market and AVN's business model. It has since become quite clear that this is not due to his own judgement but instead he has blindly followed those of his 'informant'.

Subsequently we saw his bizarre, and surreal as far as I'm concerned, postings of his football and horse racing bets; most of which lost I believe.

I can only come to one conclusion; that he is not a well considered, serious investor unlike many PIs on this BB, but instead a wreckless, speculator. It amazes me that anyone at all follows his tips because the risk of losing much of your investment appears quite high.

[neverforget] 02/4/2011 07:51

For yu gg

Avanti Communications (AVN)

Satellite broadband provider Avanti Communications has seen its shares lose 40 per cent of their value since hitting a 12-month high of 735p last December. The company's disclosures and definitions have been coming under increased scrutiny now that Hylas 1 – its first satellite – is finally in orbit. Analysts, such as those at Investec, have questioned the definition of Avanti's "pre sales" metric; having pre-sold 25 per cent of Hylas 1 capacity last summer, the group is now choosing not to disclose the metric. They also question Avanti's £229m order book. Equally alarming is the 2,300p price target set by house brokers Cenkos based on the net present value of Hylas 1, 2 and 3. Hylas 2 is not due for launch until 2012 and Hylas 3 remains on the drawing board.

Ditching such a popular retail stock is brave but we feel that much of the heat that kept Avanti in orbit has come out of the shares and prospects for a significant rebound are limited. We also question the long-term need for satellite in an increasingly land-based wireless world.

[yorgi] 01/4/2011 21:00

I don't think it is the first time they have said it but I don't think you will find many here that will agree Mansard. I think we are just going to have to be a little patient to know who is right. But quality never comes cheap !

[mansard] 01/4/2011 20:39

I notice today the Investors Chronical says this a share to dump as it has limited appeal at this price!

[yorgi] 01/4/2011 19:17

I know I shouldn't smile but :-)

[colva] 01/4/2011 19:04

On the subject of short sellers.

Tuesday 29th March - Simon Cawkwell went long Irish Life & Permanent ( IPM ) at 60 cents.

Today IPM closed at 16 cents - and he says "No opinion is now offered".

[buck581] 01/4/2011 18:09

Orchestrated short sellers keeping the share price down in my opinion. Usually at the end of the day.

Misguided and mis-informed I think.

They're going to get their fingers burnt big-time.

[yorgi] 01/4/2011 15:29

So true, our day will come :-)

[greengiant] 01/4/2011 15:28

Disappointing FTSE up 1.50% and AVN down 1%. But hey ho, the day will be ours (just don't know which day)

:-)

gg