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Technology Stocks : Nokia (NOK)

NOK 6.530

-0.2%

Dec 23 3:59 PM EST

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To: Nils Mork-Ulnes who started this subject	4/26/2001 12:18:54 AM
From: Ruffian	of 34857

"Blame The Companies Mark Ottowell, a spokesman with the U.K.'s Department of Trade and Industry, tells Wireless Insider that the companies incurred large debts in buying 3G licenses because they weighed the commercial value of the licenses. Ottowell's department overseas the Radiocommunications Agency, which conducted the 3G licenses early last year. Five companies paid a combined 38.5 billion euros ($34 billion) for the licenses. He stresses that the agency conducted the auction in a "fair and open" way, which was its only responsibility. The outcome was up to the bidders, he adds. The companies that won licenses are "big boys" who can afford to pay high prices for their licenses, he says. He says he doesn't expect any delay in 3G rollout as a result of the high license prices. Harald Dorr, spokesman for the German Regulatory Authority for Telecommunications and Posts, tells Wireless Insider that the country's auction was "transparent and without any discrimination." He declined to comment on the communication or whether the prices paid for the 3G license were too high." These are very significant quotes because they reflect that there is no desire by the governments to renegotiate the licenses. In one of my prior posts, I hypothesized (sp?) that the companies had four options, only one of which does not place the companies at long term risk. The options I see are: (a) they declare bankruptcy and restructure the debt (not likely); (b) they have a quick and risky deployment of GPRS and WCDMA (not likely; (c) they carry the debt for a substantial period while waiting to see if WCDMA works and can be deployed (likely but not attractive); or (b) they move to CDMA (attractive but difficult to do politically. I think the decision to deploy CDMA will only be made if: (a) verizon's test deployment is an overwhelming success within the next 6 months; and (b) the carrying costs of the debt and associated risks of a successful GPRS and then WCDMA deployment outweigh the political strength of the Nokia and others. This will still take time to play out.

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