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Technology Stocks : Nuevo Grupo Iusacell (CEL)
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To: Lance Bredvold who wrote (102)4/9/2001 11:02:40 AM
From: Dennis Roth   of 206
 
You should thank Rob Preuss. He started the thread and has carried the torch the longest. I just cut and paste press stories as I find them.

Bell Atlantic is the managing partner of Iusacell as they are of Verizon Wireless. If Vodafone doesn't like the way Bell Atlantic runs Verizon Wireless, they shouldn't have bought into Iusacell. I think the opposite is true. They must like the way Bell Atlantic manages cell phone companies.

There has been persistant speculation that Vodafone would buy control of Verizon in the British press ever since Bell Atlantic and Vodafone Airtouch merged in April 2000. I guess the need stories to fill out their papers. I don't think Vodafone wants Verizon's land line business.

The latest iteration of the story is that Vodafone wants control so they can force a change in technology. This doesn't make sense if you assume that Vodafone is a profit maximizing organization. Neither Verizon Wireless nor Iusacell has any UMTS spectrum and none is likely to become available in either Mexico or the USA before 2003. The best way to maximize profits for Iusacell and Verizon Wireless is to deploy 1X in their existing spectum and there by nearly double their call carrying capacity. Vodafone would not stand in the way of that if you assume they are a profit maximizing organization and not a GSM crusader. It is a Eurocentric fantasy that CDMA One companies in North and South America would follow AT&T's lead and do a GSM overlay of their networks. The idea that Vodafone would use its minority interests in CDMA companies in order to stop 1X and promote GSM overlays or waiting for UMTS in new spectrum not yet identified or made available doesn't make good business sense. I don't think any CDMA One company will do a GSM overlay instead of a 1X upgrade, not if you look at the relative costs and the impact on call carrying capacity in the available spectrum.

The only significance I see in Vodafone's investment in Iusacell is they recognize a good investment opportunity when they see it.

The only factors that may slow 1X deployment in Latin America is the notorious Nokia bug that prevents Nokia CDMA phones from working on 1X networks and a possible economic recession that would cause companies to reduce captial spending and put 1X upgrades on hold.

The Nokia bug could have a big impact on LWIN and many of the Latin American carriers because many of their customers have Nokia CDMA phones. I wonder if anyone knows how many Nokia CDMA phones are in the hands of Iusacell's customers and what impact that will have on Iusacell's upgrade plans?
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