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To: elmatador who wrote (5213)	9/14/1999 5:08:00 AM
From: elmatador	Read Replies (2) \| Respond to of 12823

This is my analysis of the ADSL case for Brazil: The developed world accounted for the majority of investment (US$ 100 billion out of a total of US$ 130 billion in 1993) which provide the major market for telecommunication equipment manufacturers. The modernization of the developed world is completed. As the OECD countries' modernization completed, operators were left with two choices: 1) invest in new, more complex and risky services in their home markets or, 2) invest abroad to extend, and modernize, developing countries? networks as privatization and de-regulation continued. They took the second option and went for wireless and wireline abroad. Staying with the Brazilian case. Regulations in Brazil provide a window of opportunity for higher profits through limited competition over a limited period of time. Operators Portugal Telecom, Telefonica and Telecom Italia put a premium on the licenses for Telebras operations. It must be noted that operators that are presently forced to provide more complex services with limited pay back, in their home markets to fight off CLEC's -mainly US operators and European Deutsche Telecom- were absent from Brazil?s auctions or did not offer higher premiuns for licenses. Portugal Telecom, Telefonica and Telecom Italia, as well as the local consortium, will try to make most profits during the limited period without competition. This means the period under which they will only compete with the mirror operators. Consequently they will not, at first, introduce more complex services in Latin America. They will follow the path all operators did in developed markets early this decade. This works in our favor if we don't offer ADSL in the next couple of years. The US, and by extension all OECD countries, have a rigid and over-dimensioned network. Operators found more profitable to sell a second line POTS line rather than go for ADSL or other medium. In the US , yearly growth of PSTN went up from 3% in 1989 to more than 16% in 1996. From 1990 to 1996, thanks to the Internet, 13 million lines were installed in the US. That represents additional revenue of 260 million per month. Not bad business for a jumper wire in the MDF!!! Given the above, (and the fact that developing countries is business driven now) it can very well be that this 10% -in Mats chart- will stay there up to 2002 even without ADSL. It was steadily there at 10% in the OECD countries -for ten years- while they modernize between 1984 and 1994. Which is not a reason for us to stop. We surely need ADSL there and other paces, it not a matter if, but we are discussing here is just WHEN.

To: elmatador who wrote (5213)	9/14/1999 12:01:00 PM
From: Bernard Levy	Read Replies (1) \| Respond to of 12823

elmatador: The trouble is that to my knowledge, Ericsson has not won a single major North or South American LMDS equipment contract. The big players are NT, LU, GMH, NN, CSCO and MOT through their jointly owned subsidiary (former Bosch Telecom), ... Ericsson is nowhere to be seen. Also, putting together a P-MP system is actually very difficult. The hardware is the easiest part of the story. The ATM wireless or wireless IP software is fairly difficult to implement. The bottom line here is that Ericsson will be too late to market. All big ticket P-MP purchases by LMDS license winners or big fixed wireless companies (WCII, TGNT, ARTT, NXLK) are being finalized, and latecomers will need to wait for the next cycle. Best regards, Bernard Levy