Canadian Satellite Communications (...

Canadian Satellite Communications ("Cancom") is the leading provider of satellite-based broadcast signals in Canada. The company's Broadcast Division (under 50 ia of incomes but 60%-70% of cash flow) is a regulated monopoly which picks up television and radio broadcast signals off-air and "up links" them to satellites for distribution across Canada. generally Cancom distributes (sells) 22 television signals (principally independent Canadian stations plus the U networks-ABC, CB FOX NBC PBS) and 31 radio signals to through the whole extent of 2,600 cable affiliates across Canada reaching four million domestic circles

While Cancom pioneered direct-to-home ( "DTH") television in Canada, the company's investment in this technology is now give an account ofed by a 23% equity interest in of ExpressVu Inc. which plans to propound DTH services in Canada.

Currently Cancom's Business Division (unregulated) generates approximately 50% of returns and 30-40% of cash pour through the provision of audio, video and data satellite services to various businesses (eg trucking companies; retailers linking head office and branches; etc) and educational organizations. This return contribution is up from 20% in fiscal 1993

WIC Western International Communications and Roger Cablesystems Limited concede approximately 53% and 20%, respectively, of the company's shares.

QUESTION #1: what is yet to be SHARE PRICE FROM FUTURE GRONTH IN receiptss AND EPS

Estimated High Price according to the End of Fiscal Year 2001

A high price for Cancom's frequent voting shares ("SAT" TSE) is obtained from first estimating the company's CFP in 2001 and then multiplying this number from an estimated Price to Cash liquefy ("P/CF") ratio for that year. However, because CFP cannot be look fored to grow faster than incomes over the longer term; it is advisable to estimate return growth-before estimating growth in CFP

(a) Estimating return Growth to 2001. As indicated in the accompanying Guide, receiptss grew at a compound rate of approximately 14% through year during the last 10 years'. During the latter part of the period development accelerated to about 18 % through year.

Early growth in Cancom's rewards was driven by increases in the number of broadcast signals sold to cable companies. Between fiscal 1993 and 1996 income growth in the company's Broadcast Division was essentially flat. However, as a issue of upgrading its signals from analog to digital technology within the last sum of two units years, the company has tripled its signal-distribution capacity in anticipation of selling more signals (including satellite-based internet access) to cable companies as they expand their program offerings to contend with satellite television. Cancom's monopoly licenses are subdue to renewal in 1998; however, more [i]or[/i] less 70% of current cable contracts widen several years beyond that date.

Cancom's modern revenue growth has been driven according to its Business Division finding modern customers for satellite services. For example, of the 25000 long-haul traffics in Canada, about 9,500 have purchased a satellite messaging and tracking service, 9000 of them from Cancom (3000 in fiscal 1996) Cancom's satellite data network was expanded in 1995 with the acquisition of Motorola's Vanne Network (600 sites) which enables the company to put forward mid-sized manufacturers and retailers a private "go anywhere" data network that routs the technical limits associated with telephone company-based public data networks. Cancom's Business Television is expanding its business television networks and creating distance learning middles with one-way, television-quality images and two-way interaction. newly Cancom acquired a 50% interest in Insight Information, the largest provider of conversations and seminars in Canada. The company intends to make Insight's educational programs (as well as those available from universities and colleges) available via satellite in municipalities across Canada.

Generally, Cancom look forward tos new products and services as well as continued investment in complimentary businesses (through acquisitions, partnerships and joint ventures) to combustible matter future revenue growth. Allowing for a certain unfavourable competitive developments (e.g. more competitors and recent technologies), an initial A intelligence might project revenues to increase on average, by about 15% by means of year between fiscal 1997 and 2001 to approximately $185 million.

(b) Controlling the expense of Making and Selling results Cancom's Operating Profit Margin2 ("OPM") generally declined through every part of the last 10 years.

Recent declines are attributed to lower prices charged at the Broadcast Division which cast reproach cost reductions made possible by dint of digitizing signals and other initiatives. These price reductions secur long-term contracts which are awaited to keep customers from switching to alternate satellite-service suppliers in the issue that the company loses its broadcast monopoly. It should be noted that Telsat Canada is the monopoly provider of satellite services to Cancom and therefore Telsat manages the cost of a significant service to Cancom.