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TWST: Could we start with an outline sketch of the universe of telco stocks that you're following?

Mr. McClure: I'll just give you a bit of background. Old Mutual Securities is the firm I work for. It's actually a very new firm, the product of a recent merger between Greg Middleton and Albert E. Sharp Securities. We are now under the banner of Old Mutual.

TWST: Have you got mutual fund operations, as well, or is it just brokerage?

Mr. McClure: Our focus is institutional sales and research as well as corporate finance. We look at the small- to medium-sized UK listed companies, in the middle market. My particular focus is on small- to medium-cap UK-listed telecom operators — companies with valuations of roughly GBP2 billion and below. The biggest companies I look at are Kingston Communications and Thus. Important companies also include Fibernet, Atlantic Telecom, Redstone Telecom and Easynet. I also keep an eye on Freeserve.

TWST: Are there any other stocks that you'd like to bring to an investor's attention?

Mr. McClure: I think Atlantic Telecom is a very interesting play. It represents a long-term investment. There are risks attached to this company though. It's a very small company, based in Scotland, which has ambitious growth plans. The core of the business has been based on delivering local services using fixed wireless access technology. This allows the company to bypass BT's local networks. Atlantic has acquired regional licence across the UK for delivering this kind of service. It's planning to roll out these services over the next three years across the UK, starting in Manchester. Manchester services should be launched at the end of this month. The next thing is that they've recently acquired a national backbone from Marconi, which will connect these regions and the operations that they have across the UK. The national network will reduce interconnect costs. Finally, they've made a very good acquisition in First Telecom, a UK-based reseller which is now moving into the directly-connected local loop market. First Telecom has established operations in Germany and they're one of the first companies to start offering broadband local loop services over DSL technology in Frankfurt. First Telecom is a DSL trialist in the UK. They're going to have a head start in terms of experience and engineering brought over from German SDSL operations. So Atlantic is going to have a portfolio of technologies through which it can deliver services directly to small- and medium-sized businesses and high value residential customers. Again, I think they're going to be positioned very well over the longer-term. In the next three or four years, their business plan is going to roll out in stages. Atlantic will sustain heavy losses over the next couple of years, but as these regional licences are filled out, revenues will grow very rapidly and profits are going to really pick up steam in 2003-2004. That's when the fruits of this investment will start to emerge. The company is nicely positioned because they've got a portfolio of technologies, and they're going to be able to move into the local loop market very quickly. They're ahead of a number of other competitors on that front. I think if they can do it right, if they can execute and keep on meeting growth targets, Atlantic will be able to generate earnings that justify a higher share price.