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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

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To: Ramsey Su who wrote (20844)	3/28/2002 11:51:02 AM
From: David E. Taylor	Read Replies (1) of 197294

Ramsey: Did CHU say anything that we did not already know? One thing I was looking for was how much they intended to spend on the GSM network in 2002. In 2001, total capex was 31.25 billion RMB, of which 20.78 billion RMB - about 2/3 - was spent on the GSM cellular network, while the government (through Unicom New Horizon) spent 24 billion RMB on the initial CDMA network in 2001. For 2002, CHU is projecting capex at 21.72 billion RMB total, so clearly they will be spending less on expanding the GSM network than in 2001, maybe around 14-15 billion (2/3), or maybe as little as 10-12 billion if spending on the other parts of their infrastructure remains constant at the 2001 level. While the press reports have interpreted the reduction in CHU capex as a negative for the future of the CDMA network, IMO it actually is a good sign for the CDMA network, since capex on CDMA will continue to be spent by the parent Unicom Group (i.e. the Chinese government), and not by the operating company. So less spending on the GSM network by CHU means that their emphasis is shifting to the CDMA business. David T.

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