Hi Yanlin,
OVERALL:
I agree.
I believe that what we have done has been to lift the collective conscience of the HC community in understanding ATC - its risks, its pitfulls, its opportunities, its weaknesses.
Our only real point of difference is with shareholder engagement, corporate governance, and the extent /manner in which shareholder disclosure has been made to date.
All businesses, during their formative stages, carry with them the best laid out plans, but few if any have contigencies in place in the event of things not going quite right.
My analysis of ATC (looking back) suggests that ATC is still at risk, financially, commercially and operationally.
Your analysis of ATC (looking forward) suggests that ATC is on the cusp of addressing and resolving each of these issues and building a strong business for the future.
My only, and continuing query, in that regard, is whether time with still be on ATC's side before it gets to these points of resolution, and whether, in doing so, it will need to cede control to others.
DAILY SNAPSHOTS:
Daily snapshots whilst good enough to show a business in transition /growth, are not good enough if they lead to value judgments beingg formed which are not then borne out by the results.
Far better for ATC to, therefore, say that in October, its revenue was X, its daily average was Y, and its peak revenue was Z. That is, as opposed to saying that 30/9 revenue was US$42,000, 24/10 revenue was US$52,000, 24/10 to date revenue was US$1.0m, October revenue was $1.2m, and forecast revenue was .
This is where ATC starts to go wrong, as extrapolations of what ATC is saying are made (intended to be made, etc) by shareholders, particularly in light of the limited coverage by brokers.
GOING FORWARD:
Going forward, however, 4 significant tests await ATC:
1)
November traffic and revenue outcomes;
2)
the Independent Expert's report on FNT;
3)
the fund-raising for the FNT acquisition; and
4)
closure of the FNT acquisition.
Regarding 2) -4), we will have to wait until December (early, or late) to ascertain what happens next - closure, variation, or extension of time.
NOVEMBER REVENUES:
As for November revenues, I believe that ATC's position is stated quite categorically in its ASX release of 6/11, as follows (in part):
"Advantage Telecommunications Limited (ASX: ATC) announced that it has received confirmation from the Chinese telecommunications authorities that the international base call rate for China has been increased
from circa US$0.02 to circa US$0.20 with effect from the 1st November 2002.....AdvanTel carried approximately 4m minutes of international traffic to
China in the month of October 2002. Assuming no growth during November, the same traffic should generate a commensurate increase in revenue at equivalent percentage margins. The company does not
anticipate a material change in traffic as a result of the rate increase".
So, what we should be seeing for November is a very significant revenue increase over the October results of US$1.2m (ie: many times over).
OCTOBER IN-BOUND TRAFFIC STATISTICS:
One further query though before I go.
It has to do with the October traffic statistics for China in-bound.
Using the US$0.02c standard (ie: AU$0.036c @55 FX average for October), then the cost to ATC of carrying the 4m minutes of traffic was $144,000 in October. At a 40% gross margin, this would suggest $240,000 or more in China linked revenue.
Yanlin, your information on this may well be better than mine.
But, if this is the case, then China is not yet accounting for a lot of ATC's monthly revenue.
If so, perhaps you could elaborate from where else ATC is earning its revenue as this may help som at HC to dis-spell whatever urban myths may currently exist out there in relation to ATC.
PAYING FOR THE INTER-CONNECTION COSTS:
Secondly, from a timing perspective, when does ATC have to pay for the inter-connection costs, vs collecting on the revenue?
CLOSING:
I gather that between our collective input, we will get to the bottom of this debate, and that HC supporters will be the better for our excahnges.
All the best.
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