An estimated 170 billion euro ($163 billion) bill facing European telecoms companies for new generation mobile phone licences may be a blessing in disguise for savvy telecoms investors.
I knew this would get a rise out of you, but I thought you'd focus on the idea that since these telcos have (or will have to) spent all this money, they'll be in a hurry to build out their networks. I remember you bringing up that idea before, but not getting much in the way of response.
I think that you and this article are right, and most analysts are wrong about the speed of the 3G build out. It's because of that that I'm even more bullish on Q now than I was back in the quillionaire days. Q's technology is nearly ready and will hit the ground running, something GPRS / EDGE and WCDMA won't be able to do, or come close to.
If you're a telco listening to your trusted GSM suppliers (years of mutually profitable partnering), it's not hard to believe that you'll give them the benefit of the doubt when they tell you how much better their product will be than the Q's. Add to that the natural prediliction of people who want to believe they were right in their last decision, and all the press and analysts reinforcing their view that they're way ahead of the yanks, and it isn't surprising that they'll side with their longtime suppliers.
Now, add to that mix the idea that they have spent a bloody fortune to get the spectrum which is a minimum requirement for staying in business. Add a pinch of anxiety over when they'll begin to bring in the revenues to offset those payments, and add in some fear when they see Sprint roll out 1X & HDR as fast, or probably faster, as they did their 1st nationwide data rollout. Now finish off with a heaping dollop of pure unbridled terror when they realize than any of their closest competitors could switch to CDMA2000 and do to them what Sprint & Verison will do to AT&T and one is bound to jump ship. One falls, they all fall, because the advantages are real and large, and inefficiency only lives when everyone's doing it and there are no choices.
Vodaphone will have had 1st hand knowledge from the US and is my best bet for storming fortress Europe with CDMA2K.
You are right that this is going to be gigantic, but I believe wrong about Q & their royalty rates. First, the governments have the enabling piece, the spectrum. 3G can be done without Q, (not well, but done) but not without spectrum. And many (Europeans and otherwise) still believe that they won't suffer any downside from GPRS/EDGE/WCDMA. Also, Q has had to fight tooth and nail to stay in the game, and cannot now just change the rates now. They are having trouble keeping people interested at 5%, because they're the underdog, and telco people who bet billion$ are not fond of betting on underdogs. However, I don't think it's a problem, nor unfair. The government's take is a one time payment, but Q will continue to take for a very long time to come, and in ever increasing amounts as the number of devices goes up enormously. Not only will lots of people buy lots of different kinds of devices, but they buy them over and over again to keep up with the latest, like in PCs but faster because they're cheaper and people will be more emotionally attached to them.
Expensive spectrum means both that it is obviously worth a lot in the minds of companies with real money, and that it will move into the hands of compnies with the wherewithall to do something with it quickly. I love both of those. |
