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Pastimes : The New Qualcomm - write what you like thread.
QCOM 179.02+3.7%Nov 5 3:59 PM EST
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To: Neeka who wrote (6378)7/29/2003 6:07:20 PM
From: Maurice Winn  Read Replies (1) of 12229
 
M, they agreed that QUALCOMM royalties were too low when they bid $100bn for spectrum in Europe. They don't admit that, but that's the logical conclusion from the size of the bids.

The bidders added up their costs, including royalties on CDMA equipment, handset costs, hardware, fibre to deliver calls, buildings, photocopiers, marketing and operations and all the other things which it takes to deliver mobile cyberspace. Then they estimated their revenues for the W-CDMA services they expected to offer. Did some discounted cash flow spreadsheet stuff to allow for delays. Added profit they expected. Which gave them how much they could afford to bid for spectrum to leave the desired profit level.

They made a few mistakes. How long it would take to deliver W-CMDA was longer than they thought. Market demand was less than they thought. They overbid.

If the auctions were held again now, the price would be lower. But still very high. Just as in the C-Block auction way back in 1996 which NextWave won a lot of and nearly everyone [except me and presumably they] thought they'd paid too much for. But the subsequent wranglings and re-auction bids showed the bids were actually low.

Mqurice
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