Caxton,
The question is will they buy new phones and use them for data in significant quantity to pay for the infra buildout.
That is, imo, the big question. However, that burden of that question is on all wireless service providers.
Personally, this is what I feel. Cell phones first came out in the 80s. During that time, cell phones were bricks, expensive, and air time was expensive. It took quite a while (a little more than a decade) for air time costs to come down and the phone cost to decline.
Personally, I really don't see many people utilizing data for cell phones. I mean, Sprint PCS had a plan where people could buy things off the net using their cell phones. Has that been successfull?
It will take time for data over wireless interface to penetrate the market. Until that time, although service providers will be spending alot of money, they still will be receiving cash flows from their customers.
By chance, do you follow the optical networking industry? About 6 months ago, I recall reading about this start-up company that wanted to lay fiber coast to coast. They went to Corning (GLW) and bought about $1B worth of fiber (a percentage of that sale was due to vendor financing, it is unknown as to what percentage, tho) and then promptly went to Nortel and bought another $1B of equipment (again, a percentage of that contract was financed, unclear as to what percentage).
In that case, both Nortel and Corning are taking significant risks since that startup had a very limited operating history.
In contrast to that, Nokia is now offering financing to established carriers that at least have cash flows coming into those companies. |
