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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 159.59-3.9%Nov 20 3:59 PM EST
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To: Gregg Powers who wrote (9632)4/7/1998 9:01:00 PM
From: Clarksterh  Read Replies (1) of 152472
 
Stats from ITU on telephone access growth. From back of Apr 4-10 Economist. It gives the historical growth which follows, very well, an exponential curve. Extrapolating it forward, I would expect between 50 and 60 million telephone lines to be added in each of the next 5 years. If you assume that by 2000:

1) Half of those are WLL (cheaper and faster in all but the densest of areas)

2) 25% are CDMAOne

3) Each line costs $500.

4) Qualcomm's pre-tax profit margin is 5% (net margin for QC's brand or royalties for other brands)

This equates to $172 million in pre-tax profits, or about $1.50 EPS. This is without cell phones or Globalstar, or ... . And it may be conservative if WLL acts as an enabler, and boosts the installation rate. Several of the companies I know of which are installing WLL systems would never have tried to install land lines. Too much time before ROI, and too much foot-dragging by the local monopoly.

Comments?

Clark
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