nanog mailing list archives
Re: future transit prices
From: Paul Vixie <paul () vix com>
Date: Fri, 18 Oct 2002 22:18:08 +0000
How do you compute CGS on a network that is 25% utilized?
"bad"
Is it expenses/current utilization or expenses/maximum capacity?
i want to be in a situation where i owe income taxes. so it's all about costs vs. sales.
I think a lot of the low-ball pricing that is in the market is the result of networks selling off underutilized capacity at discounted pricing just to get some additional cash flow.
in other words, people don't know what their costs are, so any sales are good. this is one of the situations that can't last.
This pricing probably doesn't take into account the necessary capex that will be required to upgrade the network when it approaches saturation.
actually it assumes that equity funding will be available for step functions in capacity as long as the underlying business is returning high single digit NPM. (that's how large-capex commodity plays work, since share price will be a function of P:E.)
Current thread:
- Re: future transit prices Paul Vixie (Oct 18)
- Re: future transit prices joe mcguckin (Oct 18)
- RE: future transit prices Deepak Jain (Oct 18)
- Re: future transit prices Paul Vixie (Oct 18)
- [no subject] fkittred (Oct 21)
- Re: future transit prices joe mcguckin (Oct 18)