CDMA, Qualcomm, [Hong Kong, Korea, LA] THE MARKET TEST! Message Board

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Technology Stocks : CDMA, Qualcomm, [Hong Kong, Korea, LA] THE MARKET TEST!

QCOM 171.90

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10:16 AM EST

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To: Brian Kopp who wrote (1009)	10/14/1996 2:51:00 PM
From: Maurice Winn	of 1819

Brian, hello. Often people seem to forget that CDMA is intrinsically highly competitive with all the CDMA producers out to do each other in!! So thanks for that post pointing out that Motorola and Qualcomm are co-operating [via licensing] competitors. Same with Lucent and all the rest. So when Motorola slunk off licking its wounds after failing to agree to performance guarantees a while ago and people pounced on that as proof that CDMA wouldn't perform, they failed to notice the rows of competitors waiting to fill the gap. This inherently builds pressure to be in the early producer crowd or be left in the dust. There is a similar misconception in frequency pricing. Everyone "knows" that NextWave paid way too much for frequency, with Bill Frezza saying they forced the price beyond an economic level. Frezza makes the mistake of thinking that NextWave controlled the price. They didn't. They paid exactly the same as GSM and other competitors agreed to pay, so anyone who bought some spectrum, no matter how much, was equally "guilty" of setting the price. Since NextWave only bought half the spectrum, it is obvious that their price was the same as that being agreed as reasonable by all the others. In fact, because they did sophisticated bidding instead of just beating the next guy in a grimly determined battle, their effective cost of spectrum is significantly lower than the others!!!! So, Bill Frezza, it was the GSM crowd who paid too much and forced the price "excessively" high. I stand by the idea that it is a super duper bargain. $40 per subscriber. Only $4 per year needed to pay for the spectrum. Hardly a high price - insignificant really, considering the capital cost to supply a subscriber is about $1200. More for GSM!! Jim, why don't you ask Bill why he thinks the price was too high? Maurice

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