eye... I know that it's technically revenue... I know that the original contract stated that the payments included an inducement to Globetel's to participate (which some would call "profit")... and we'd *all* like for the network construction phase to be revenue with better-than-Centerline margins. But the contract is changing and I just can't imagine it continuing to look much like what we first saw in January.
We've already heard that it will have smaller, more frequent payments. How small? We don't know yet... but theoretically it could be so small as to mirror actual costs incurred... That is, the payments could become so low as to simply be reimbursements. Our partners could insist that GTE's "profit" be deferred until the operations phase (after all, isn't RP deferring it's profit until that point?).
You said that "GTE is in the business of installing wireless networks"... I'm curious how many GTE-installed wireless networks are operational at this point (and who paid us to install them)... I think it would be more accurate to say that "GTE *wants* to be in the business of installing wireless networks"... and hopefully it would be even more accurate to say that what GTE *really* wants is to be in the business of "operating" those networks.
Sorry for the confusion... my original post wasn't intended to argue the fact of whether the $600M would show up on the revenue line (it most likely would in purely accounting terms)... My point was that it might be healthier to look past that $600M... to view that money as someone else's expense rather than GTE's revenue... and look towards the payoff in (a) having someone else pay for GTE's learning experience, and (b) revenue from operations if we get to that point.
Granted, if GTE really can close this deal and keep the original terms (no financial accountability, no detailed specs on coverage area, no apparent spec for minimum network capacity, etc.), then this $600M is an incredible coup and could have very positive near-term impacts on the bottom line.
More likely, though, the final deal would push GTE's profits out to the operations phase. That would likely have adverse impacts on GTE's numbers in the near-term (i.e., revenue with no margin to show for it)... but even if it came to that, the intangible benefits (experience) and the long-term potential (operations) would make it all worth while.
glty
~rdw~
