1) Because they have exposure to the Chinese market?
2) Because they are acquiring FNT?
3) Because they have inter-connect agreements, and /or wholesale carriage agreements, in place with various international carriers (such as Deutsche Telekom, and France Telecom)?
4) Because of their wholesaling of airtime?
5) Because they do not have their switch located here in Australia?
6) Because their gross margin is much, much higher than what it was for TLO? But, if so, then what is their net result, and will they turn cash-flow positive
I remember the days of HC1 when everybody was extolling the virtues of the NTMi deal with TLO and how this would propel TLO to >$500m turnover, for profits of >$10m -$15m (net, not gross).
The figures that I quoted in my earlier posting must be converted to US dollars at an approximate 10 : 1 conversion rate. This still equates to a sizeable source of business, if ATC can unlock it. But with margin compression happening in China, and throughout Europe (and in the UK), I do not see FNT's gross margins being maintained at their current rate, and I do not see the Chinese market margins growing to the level that was previously publicised for FNT.
As Tebley has put it:
"The bottom line is, is that the market wants to see a big big reduction in the net cash outflows in the June quarterly and the postive cashflows in the Sept quarterly. Once postitive, there will be no longer a need for placements to fund operational comittments".
The testing time for ATC is now, and through the next 6 months.
ATC Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
