More responses to the Forbes article (cross-post from yahoo)
messages.yahoo.com
My take on the Forbes article
by: mvpel (29/M/San Jose, CA) 8/5/00 4:21 pm
Msg: 82220 of 82261
> Another trick for Metricom to turn is its third generation, or 3G,
> wireless technology strategy. 3G is wireless technology that will let
> today's wireless service providers build and sell 3G services, the
> question remains: What will Metricom offer?
>
> It's possible as the likes of Sprint and AT&T ramp up their 3G
> networks, Metricom could be smooshed into a niche play. "Metricom
> has an interesting service, a relatively low-cost mobile wireless
> data play," says Riyad Said, analyst at Arlington, Va.-based
> investment services firm Friedman, Billings, Ramsey. "But the issue is
> as other networks upgrade their networks to provide faster
> connections, it could render Metricom as a niche product."
These sillies. What makes them think that customers are going to be willing to pay the fees necessary to garner a profit from Sprint and AT&T's 3G networks in sufficient numbers to "smoosh" Metricom into a
"niche play?"
We have in our Metricom Yahoo Club archives, articles showing clearly that Internet access users do not want to pay per minute, and will not pay per minute. We've got the example of AOL's policy change from a few years ago to underscore that fact.
We know that the 3G spectrum in the UK, a tiny little island with a very densely packed population, went for $35 billion for five 20-year licenses. That's an average of 7,000,000,000 per license. That's $350,000,000 per year per license. We know that the population of the UK is about 60 million persons. We know from this website:
gad.gov.uk
... that adult population from the age of 20 to 64 is about 35 million people.
And we know that just about 2 years ago, that 15% of the UK was online, at around 7 million people:
cyberatlas.internet.com 1,00.html
Let's say that that's increased to 9 million since then.
So we know that in order to break even on their $350 million per year investment in SPECTRUM LICENSES alone, charging what Metricom charges -- $70 per month -- they would have to have $70 per month subscriptions from 4-5% of every online adult in the UK for 20 years. And that doesn't even count their costs in building and maintaining the network, nor profit margins. If they got a million subscribers to 3G wireless internet access in the UK, $30 per month of their bill would be spectrum license costs for just ONE of the five licenses, about what Metricom charged for their first-generation Ricochet service flat rate unlimited use.
3G is like a religion for these people. It's like they're a Millenialist cult. It's like "Waiting for Godot." It's really amazing to watch.
And they have to honor their clay-footed gods by calling Ricochet2 "hot air," or griping about subscriber numbers under previous inept Osborne-effect management in three markets with no formal advertising.
They send up burnt offerings by writing articles that fail to realize that Metricom is offering TODAY what 3G is PROMISING for a year or two from now, and thus doesn't NEED a "3G strategy," and in fact, it's the 3G carriers who will need a "Ricochet strategy."
They pay homage to their 3G idols by describing Metricom's legitimate rollout expendatures as "taking a toll" when the writer's Sprint PCS idol lost $2,214,784,000 over the last 12 months, more than twice the amount of CASH Metricom even has in the bank to finance their nationwide rollout.
Who's building the cost-effective network here? Who's building the scalable network? Who's building the network that won't stun its subscribers into a coma every month with the size of their bills?
With Sprint charging more per minute for poking up local movie listings on a tiny green screen than the cost of a local newspaper, I don't think it's Sprint or the other deities worshipped by writers like this Forbes author.By the way...
by: mvpel (29/M/San Jose, CA) 8/5/00 4:26 pm
Msg: 82223 of 82264
$35 billion for five 3G spectrum licenses in the UK translates to $583 for EVERY man, woman, and child alive in the UK today.
Do you think they're going to offer flat-rate unlimited use billing? Duh.
-Michael Pelletier. |
