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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: w molloy who wrote (3556)	2/3/2000 11:54:00 PM
From: Gus	Read Replies (2) \| Respond to of 34857

Things Aren't So Rosy Douglas MacLellan, chairman of Wireless Electronique, Ltd. (Welcom), does not believe the picture is as rosy as China Unicom paints it. Welcom, a telecom company, entered into three separate CCF contract with China Unicom for the regions of Yunnan, Inner Mongolia and Ningxia with a population base of over 250 mln in the Spring of 1998 and is one of the many foreign investment partners that are still in dispute with the Chinese telecom. First, MacLellan doesn't believe that very many foreign investors have actually completely settled with China Unicom. "About half of them may have signed letters of intent," he said, but "very few" have gone through the complete process of settling (i.e. signing a definitive contract, beginning the process of transferring funds, etc.). Second, MacLellan feels the companies that have settled have gotten a bum deal. "These are big companies with other interests in China," he said. They have "taken it on the chin" with regard to their CCF contracts so that they can make money on their other projects in China. Welcom, in contrast, is not so large, MacLellan said, "we don't have any other projects China." So companies like his are insisting they get the returns agreed to in their original contracts with China Unicom. In Welcom's case, the company made an initial investment of US$25 mln (US$5 mln in equity and US$20 mln in debt) to build mobile phone networks in the interior of China. MacLellan entered into the deal with an anticipated internal rate of return of nearly 50% per year on average over a 15 year period. "We are seeking our anticipated fifteen years return," he said. That translates into approximately US$485 mln, according to MacLellan?s calculations. China Unicom, however contrary to the agreement it originally made with Welcom is only offering to return the initial direct project investment "plus a tip," MacLellan said a small percentage increase. Needless to say, he is not happy with this offer and is willing to take legal action to get what was originally agreed to. chinaonline.com P.S. On the same day that the QCOM/Unicom deal was announced, Samsung also got approval for the continuation or expansion (still checking) its BCDMA wireless local loop project in the Guang Dong province. That's the concrete product of the Samsung/IDC co-development deal detailed in the SEC filings. The same BCDMA technology that is part of Nokia's ongoing WCDMA trials in Japan, China, Finland, etc. Already, the range of possible compromises available to Unicom to resolve its CCF dilemma in order to clear the way for a $3 billion mid-year IPO is starting to form around the lowest cost 2g technology with a demonstrable roadmap to 3g.