Vodafone-Airtouch (NYSE: VOD) Message Board

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Technology Stocks : Vodafone-Airtouch (NYSE: VOD)

VOD 12.59

+1.7%

Dec 3 3:59 PM EST

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To: David Wiggins who wrote (607)	1/7/1998 3:30:00 PM
From: John Nail	Read Replies (1) of 3175

I was just going to agree with your 3 assessments. They closely follow the tune I have sung about this company for a year and a half. 1. Increased compeition is less threatening in this business due to high barriers to entry. New entrants must expend huge amounts of up-front costs to finance their entry. Current market particiants have had several years to write down those costs, so their marginal costs are lower since their fixed costs are lower relative to new comeptitors. 2. Which leads to your second point, new competitors increase the total market demand for service. In fact, point 1 and point 2 can be combined, my friend who works on Iridium says their cost structure is already so high, and they are still a ways off from launch, that they cannot afford a price war with established providers but will need to establish new markets in data communication. 3. Overseas, they will make a killing in many countries. First, cellular phone usage soars when it is introduced. It provides cachet. It's a monopoly-killer mainly those state-run monopolies that still take 5 years to install a copper phone line. With ATI, they just toss you a phone and say "Turn it on".

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