For the record: Buyers be ware ...
"If the AT&T Wireless IPO (Irredeemably Pathetic Offering) succeeds on the scale T is predicting it will be an even more amazingly Barnumesque feat than Craig McCaw's unloading it on AT&T the first time. Inferior by far even to GSM, the European TDMA standard, AT&T's American TDMA network has no future at all. Literally. Incapable of carrying bursty Internet data at any reasonable speed, TDMA will likely never evolve into a 3G standard.
Currently U.S. TDMA carriers can offer data only on a separate Cellular Digital Packet Data (CDPD) network operating at a humble 19.2 Kbps. GSM networks now poking along at only 9.2 Kbps for data have a relatively easy and inexpensive upgrade to a "Generation 2.5" system known as GPRS, which will eventually offer data at up to 57.6 Kbps. That's paltry compared to Qualcomm's G2.5 entry, the CDMA2000 system offering nearly triple the data rate and, unlike GPRS, allowing voice and data to use the same channels. Far from leeching voice to support data, CDMA2000 actually doubles the voice capacity of existing CDMA networks.
AT&T, however, does not even have GPRS to fall back on, since that is a GSM-only upgrade. For robust data, AT&T must wait-possibly forever-for EDGE, slated to trail CDMA2000 by at least a year, and featuring a data rate of only 384 Kbps, one sixth Qualcomm's coming HDR (High Data Rate) system. Worse yet, EDGE is not an extension of American TDMA but a separate network overlay requiring its own dedicated spectrum.
Already some three times less spectrally efficient than CDMA for voice, the AT&T network is thus about to be impaled on the cruelest dilemma facing wireless carriers today. Wireless customers increasingly will expect robust data capacity. But at a time when most wireless networks can sell all the voice minutes they can supply, dedicating channels to data is a painful and costly exercise.
CDMA2000 turns that dilemma into an opportunity as early as the end of this year, offering data while doubling voice capacity without hogging dedicated spectrum. HDR will require a dedicated channel. But at 2.4 Mbps, six times as fast as EDGE, the trade off is easier to justify.
If EDGE ever emerges from vapor, AT&T's only robust data option will require it to permanently trim voice capacity from an already inefficient system, while Sprint PCS (PCS) and Bell Atlantic (BEL)/Vodaphone (VOD) double voice capacity and add data for one-third the investment.
The data dilemma dooms American TDMA networks. The Bell Atlantic/Vodaphone partnership (inexplicably renamed Verizon) abruptly thrusts AT&T into a distant second place in wireless market share. T's only remaining advantages are cash, bulk, and an increasingly compromised brand. In thrall to a bankrupt technology, all three will waste away." -George Gilder, April 20, 2000, GTR, source: gildertech.com
Note that the Gilder Technology Report is a technology letter, not a stock letter on valuation or timing of individual stocks. |
