Implications on Valuation (of Technological Change) Jerome C. - - PDF document

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Presented at TFI Communication Technology Asset Valuation Conference Jan 24-25, 2013 Please contact Mr. Weinert or TFI regarding reproducing presentation material. TFI Valuation Conference January 24, 2013

Implications on Valuation (of Technological Change)

Jerome C. Weinert, PE ASA, CDP AUS Consultants E‐Mail: weinertj@auswest.net

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Presented at TFI Communication Technology Asset Valuation Conference Jan 24-25, 2013 Please contact Mr. Weinert or TFI regarding reproducing presentation material.

Impacts on Value of Transmission Technology

• Cost of Replacement (COR)

– Increases in Opto‐Electronics Capacity reduces the need Increases in Opto Electronics Capacity reduces the need for fiber infrastructure. – Reduces the Replacement Cost of Equipment when compared to Historical Equipment Cost.

• COR less Depreciation

– Rapidly changing opto‐electronics systems and their capacity reduce the life of current and historical systems. capacity reduce the life of current and historical systems.

• Economic Obsolescence

– Requires less individual opto‐electronic systems which reduces operating cost.

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Presented at TFI Communication Technology Asset Valuation Conference Jan 24-25, 2013 Please contact Mr. Weinert or TFI regarding reproducing presentation material.

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Presented at TFI Communication Technology Asset Valuation Conference Jan 24-25, 2013 Please contact Mr. Weinert or TFI regarding reproducing presentation material.

Economic Obsolescence

• Declining Revenues

Increases in Opto Electronics Capacity produced vast – Increases in Opto‐Electronics Capacity produced vast capacity which reduced the prices carriers charged customer resulting in declining revenues.

• Operating Cost remain firm

– Inter‐city networks being vast are cost intensive and those cost are relatively fixed

• Declining Income

– As a result net incomes are declining and many are in fact negative