The difference between the fiber guys and wireless that the market doesn't uncderstand:
1) There is no wireless glut, which is the case with fiber. More spectrum is needed and everyone knows it. Phone subs may be saturating, but not use of cell phones. More and more information is becoming available on wireless phones that is now only available on the net thru landline, newspaper, tv, maps, etc. The more they are used, the more efficient use of spectrum becomes for both voice and data. Advantage QCOM.
2.) The market is associating the failure of the fiber companies with their children, the wireless providers. What is actually happening is that the wireless carriers are stealing users from land lines in a huge way. "Free long distance" is the killing the revenues of the long distance carriers like MCI, Sprint, T, etc. Advantage QCOM.
3.) As wireless minutes get cheaper and cheaper, the wired telcos lose more and more traffic. The reason I bought qcom in the first place was the thought that "there is going to be a wireless price war", and QCOM is selling the bullets. People are using their cell phones more and more, NOT LESS, they are just paying less per minute. Mr. Market sees a wireless price war as a big negative for the market, but I see it a huge plus for QCOM.
4.) Mr. Market underestimates the "cash cow" that the wireless carriers are.
Caxton |
