Just running through some numbers for ASC that ive had laying around for a while, and thought it might be good to make a separate post to explain how i see it, keep in mind i am not an industry insider, so i could be missing some obvious points, happy to be corrected.
In answer to @G650er question from another thread, there is no income yet, there have been 5 agreements completed so far according to the mid year report, and prepayments where described as a 'decent amount' by the CFO (iirc), which is hard to read much into.
In the Q1 update key points mentioned where;
20+ key live prospects with major carriers and global OTTs
8 opportunities in advanced stage representing in excess of 3Tb/s capacity
Potential to avoid estimated $110m cumulative international IRU spend to FY22 through strategic swap arrangements
Revenue comes from Pipe+Port, pipe is the cost to get between landing points, port is cost to go anywhere.
Port is more expensive, especially in Australia, which is why its piped to cheaper overseas port for delivery.
Its also why the Great Southern Route (GSR) US-SG has a chance of seeing some traffic, its two pipes with no Australian port costs, even so the pipe costs will have to be below half the current pipe costs are, in practice i things its a short term move to make some revenue from otherwise unused capacity.
Im assuming AU-SG prices drop to about the same as AU-US due to competition, 100G price in those slides is US$28,000 per month, and elsewhere there is said to be a 4.5x multiple to go from 10 to 100 (volume discount), so 10G should be about US$6,200 per 10G per month.
I believe there is typically a 30% utilisation (which i might have misunderstood), and assume we get a third of port traffic (it could be offloaded to other carriers when it gets here).
If sold as 100Gbps lots revenue should be
Column 1
Column 2
1
Pipe: 100G p.a
0.336
2
Port $/mbps/month
5
3
Port Utilisation
10%
4
Pipe+Port
0.936
5
US$/Tbps
9.36
If sold as 10Gbps lots we get more per Tbps
Column 1
Column 2
1
10G p.a.
0.075
2
Port $/mbps/month
5
3
Port Utilisation
10%
4
Pipe+Port
0.135
5
US$/Tbps
13.5
So, assume there will be a mix and we end up about AU$14.5m (US$11.5m), we need equivalent to the following 100G/10G traffic to breakeven. Not include GSR because there will be much cheaper. Also assumes prices decreases and demand will increase and they will cancel each other out (each about ~30% pa).
Column 1
Column 2
Column 3
1
Year
Breakeven Cost
Tbps Breakeven
2
24.2
1.7
3
1
22.1
1.5
4
2
20.0
1.4
5
3
17.9
1.2
6
4
15.8
1.1
7
5
15.6
1.1
8
6
15.5
1.1
9
7
13.9
1.0
10
8
13.6
0.9
11
9
13.3
0.9
This looks achievable given they where talking about 3TBps 9 months ago. The existing route SMW3 is 12Tbps and said to have been 'near capacity' for a few years, if traffic ends up being split 3 ways between ASC, Indigo and SMW3 that 4Tbps
VOC Price at posting:
$2.39 Sentiment: Buy Disclosure: Held
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