Hey telcowiz, ever worked in a telco?. Well I have. I have worked in a Telco infrastructure business as well as retail and the amount of spend required on their internal systems is huge, every year. They have significant IT issues - especially in M2. They will need mega bucks in there.
Also, the annual spend on mtce, and upgrades etc, is a minimum of the annual ammortisation figure. That's the purpose of ammortisation.
Have a look at their accounts. They spent $68m on existing assets. Ammortisation was $58m. So basically, that tells you that just to maintain the effectiveness of existing assets, they needed to spend $58m. They spent an extra $10m. These numbers exclude the new project stuff.
Telcowiz, the actual fibre in the pipe may last 25-30 years but the pipe needs mtce. And a lot of that is expensive as it is on/under the sea bed. Also the technology costs to manage and run the fibre is a little more than $1.50.
Questions for you - If earnings are so good and debt isn't an issue, then why has the SP dived from circa $9 to $2.30? SIMPLE - level of debt. Oh, and why are Vocus selling profitable businesses??? - because of debt. The high level of debt is a huge cost as well. currently at circa $40m p.a.
I'm not going to respond to your comments on this thread anymore because you are the only one that thinks Vocus's level of debt is fine. Not even the Board (past and present) agree with you.
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