Kieth. I have to say that there must be severe complications for vendor financing here. First, vendor financing, is a simple term for what must involve the participation of various Euro financial institutions. Clearly, the lenders front the financing subject to various guarantees and revenue pledges from the operators.
If all operators go in all countries, then GPRS competes only with GPRS and however bad it is, operators survive due to a lack of competition with a superior system such as 1XRTT. However, if it comes to pass that an operator install 1X-RTT and customers enjoy it, perfer it, and buy it, then GPRS faces real competition and competing operators suddenly find that their GPRS service becomes a looser. Thus, the lenders find that they have a non-performing loan.
If VOD sold valuable assets to raise the cash to purchase 3G licenses in UK and Germany, then they dodged a cash flow problem. However, they still have a severe return on assets problem that won't subside until the 3G spectrum is used in a way that earns a profit. Just because VOD swas able to sell assets to purchase spectrum does not mean that the other purchasers of European 3G spectrum were equally fortunate. I really have no knowledge about this.
No matter how the various operators funded their spectrum purchases, it is inescapable that these huge outlays are non-performing assets for the forseeable future. Now that is a problem.
JohnG |
