They haven't announced revenue. What was in the announcement was, in my view, nothing but aspirations. Where is the modelling that saw SOL Telecom arrive at those projected numbers? How do they plan to meet those targets? A couple of points that should be explored by investors:
1. How many OTT operators are there in Brazil? Following from that, what percentage of the market does the SOL projected target imply? Supplementary question: is that feasible?
2. Is subscription-based the main form of content delivery in Brazil or do economic and social factors impact on how people access content? In preference to subscriptions, is single-purchase VOD the more common method of delivery in Brazil? If so, where has SOL derived their subscription targets from?
Many on here are scratching their heads wondering why this hasn't shot into the stratosphere on the back of this announcement but maybe you should be peeling back the layers and doing a bit of analysis. The key errors I see over these past few days are:
1. Overambitious subscription payments per subscriber;
2. Misunderstanding the concept of "aggregate" and assuming the subscriber base is at the full figure for an entire twelve months;
3. Neglecting to factor for increased costs of delivery. It has been presumed that all this revenue flows in for zero associated outgoings.
4. Neglecting to consider the current base expenditure of the company that still far exceeds what they will supposedly be bringing in.
The smart money has already done all of this analysis and run correct numbers. Until people actually see TV2U content being delivered by SOL, in suitable numbers, with associated revenue then it is no more concrete than Toomai with their guaranteed minimum number of subscribers, K2U with its rollout to 25 countries before the end of last year and Divan content being rolled out a year ago - all finger in the air stuff with no sound underlying modelling to support it.
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- Ann: Contract amendment with SOL TELECOM & Promotional Launch
Ann: Contract amendment with SOL TELECOM & Promotional Launch, page-86
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