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Technology Stocks : The New Qualcomm - a S&P500 company
QCOM 174.01-0.3%Nov 14 9:30 AM EST
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To: Dennis Roth who wrote (9074)4/23/2000 9:44:00 PM
From: Maurice Winn  Read Replies (1) of 13582
 
Dennis, there is going to be about $200bn in 3G spectrum value transacted in Japan. Q! is very sensible to try to get a piece of that if there is to be a beauty contest [they'll need a Japanese face such as Hitachi owning most of the consortium and Charlene's backing to have any chance].

$200bn comes from Japan's GNP per person, number of people and age, crowded cities and therefore spectrum, with these factors compared with the UK where there are half as many people and they have half the GNP per person, less inclination to electronic gadgets, and less crowded cities and 3G bids now total about $36bn. Okay, maybe the value of 3G spectrum in Japan will only be $130bn, but it's still a wad of cash to be given to three or four companies.

There will NOT be any savings to subscribers by giving it away - the service providers will, as always, sell for what the market will bear. People mistakenly think that pricing works on a cost plus basis. It does when resources are unlimited and competition is open and easy to enter. In those cases, if you charge more, the competition undercuts you. When spectrum is in short supply, minutes or megabytes will sell at a price to balance supply and demand. Japan can't make those minutes cheaper by giving away the spectrum.

This fourth application is going to really throw a spanner in the works as you say!

This will be fun.

Mqurice
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