WCOM Message Board - Msg: 17568823

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Technology Stocks : WCOM

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To: tejek who wrote (10510)	6/6/2002 8:10:03 PM
From: Thomas Walker	Read Replies (1) of 11568

they are not making money for the PRECISE reason that they all paid for their license spectrum and BUILT their own network. If Sprint didn't have to shell out a single penny for license or network buildout or engineers to RUN their cellular network, are you trying to tell me that they would STILL LOSE MONEY??? One comment that I would like to make to this is that those costs will be INCLUDED in the resell rates that Sprint PCS and the likes will be charging for resale. There's a per month charge for having the subscriber on the network (replaces network buildout, license and operational costs) and a per minute fee. Some of the costs that make wireless tough to make money in that WCOM would have to incur and the costs of acquiring customers (typically $300-500 a piece). Getting a $300 phone for $89 or free cuts into profits. Industry experts say it takes around one year before a carrier breaks even on a customer. It typically takes more time on lower end customers. I'm also guessing that the spread between what WCOM pays the carrier and what they receive from a customer has narrowed over time, giving them less of a margin to make a profit on.

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