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Technology Stocks : Nokia (NOK)

NOK 5.935

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3:59 PM EST

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To: tero kuittinen who wrote (3197)	1/4/2000 4:39:00 PM
From: slacker711	Read Replies (1) of 34857

That's why they're investing in GPRS - which costs only 30% of the initial mobile network investment. You can claim that even this is expensive - but guess what? Most GSM operators can afford that, because they're already solidly profitable. What I cant figure out is why all of the European nations are going ahead with the auctioning of 3G licenses since GSM operators won't need them.....they have GPRS. It makes perfect sense for an operator to spend billions on a license that they have no plan on using <g>. It will be interesting to watch....one of the things that I have noticed is that it seems like operators are interested in seriously expanding their networks through 3G. For example One.tel does not currently have a license in the UK (at least that I know of) but they plan on bidding for a license. Let's go through the scenario if they win.... The rest of the UK operators have their state of the art GPRS/EDGE networks....the only way One.tel can compete is to begin offering full 3G services. They arent going to build up an EDGE network since they would have to completely change out the RF portion when they eventually upgrade to W-CDMA. So....One.tel will be sitting there with a very expensive W-CDMA network but no customers. What will they do? Well...cut prices like crazy sounds like one very likely scenario. They will have the advantage of not having any customers using bandwitdth intensive older handsets (GSM)....plus the One.tel network is inherently more bandwidth efficient than GPRS. It looks an awful lot like what Qwest has done over the last few years to wired bandwidth in the US....prices dropped with usage correspondingly going up. We'll see how this scenario plays out....of course the first step is to see how the 3G spectrum auctions go. One thing is for sure....I wouldnt want to be a GSM operator if the above occurrs. Price wars tend to hurt those with the least efficient production facilities. Slacker

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