3. Financial Forecasts
Because of the tentative nature of the bidders' telecommunications plans, their financial forecasts have to be regarded as proforma. Telecommunications revenues are likely to cover operating costs because each bidder will probably introduce service only to the degree that there is market demand. The initial basic investment for the fibre infrastructure is quite low, and additional investments will only be made to serve known market demand. For this reason, we expect the telecommunications financials to be robust in both cases.
However, HKCC's capital expenditures, Figure I-12, are somewhat lower than even Scenario 1 for HCV because HKCC does not intend to introduce switching capacity until 1995. From then on, HKCC's capital investments approach those of HCV's. Likewise, HKCC's revenue expectations prior to 1995 are extremely low, Figure I-13, lower even than that of HCV's more conservative scenario. From 1995 onwards, HKCC's revenues grow strongly to approach those of HCV's.
1500
1000
500
Figure I-12
Forecast Cumulative Capital Expenditures
on Telecommunications Networks
Scenario
Scenario
Scenario
HKCC
1 (HCV)
2 (HCV)
3 (HCV)
Projected Financial Commitments (HK$ M)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: HCV, HKCC proposals
Year
Arthur D Little
19
No comments yet.
Private notes are available after approval.