this is getting ridiculous, page-12

Dhukka

Thanks for pointing out the announced shortfalls of $10M revenue and $3.5M NPAT.

As for making up the revenue through other sales, a few points:
- their key market is ISPs. They aggressively pursued sales on PPC-1 early on and have signed agreements with the bigger suppliers. The ISP market is a shrinking one with regular consolidation of players.
- the other fibres into Australia have large amounts of spare capacity. There could quite easily be a price war with downward pressure on bandwidth prices.
- with the potential for the NBN, the rollout of DSLAMs into exchanges by ISPs will grind to a halt and businesses will not commission expensive fibre installs when the government has committed to doing it.

As I see it they will have to take an even more aggressive pricing structure to get the additional sales, which in turn will only marginally improve the NPAT.

My reading of their situation could be wrong, after all, it is only my opinion, however I still think the sale price is a good'un.

It will be interesting to see how the due diligence is getting along.