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To: w molloy who wrote (6830)	2/24/2000 6:49:00 PM
From: engineer	Read Replies (1) \| Respond to of 13582

WM Your assumption that GSM is cheaper since it is fully amortised is not true. CDMA was lower costs in year 3 (1997) and has been staying on par ever since. Now that ERICY has the infra division and acccess to the newer smaller cheaper cell equipment, it should out run the GSM economies and provide ERICY a beter margin return for the technology sold. the crossover in handsets was in 1999 for over all costs. The over all network costs of GSM are higher still today than CDMA from a return on invested dollar for the carrier. Or better yet, POPS per Mhz per dollar invested.

To: w molloy who wrote (6830)	2/24/2000 7:34:00 PM
From: qwave	Respond to of 13582

<<I had much the same response back in September '98 when I suggested that the Infra division was heomorraghing money and in April 99 when I suggested that the handset division would be sold off.>> Your suggestion? You must have been hearing the same rumors I was hearing. <<Regarding your first paragraph, you are essentially agreeing with my point regarding CDMA adoption being 'sponsored' by the US government. This scenario is quite likely, given that this is an election year. I believe the Chinese news is partly due to this. They are rattling the cage just to remind the US (and QCOM) what the stakes are.>> Sponsored? How about a level playing field. The Chinese government is blatantly corrupt. Payoffs are common and the Europeans go along with it. It is sad that the US government has to step in but look at who we are dealing with. This has more to do with establishing/maintaining national policy than with making sure QCOM gets its royalties. <<Rather presumtious of you, but lets put the big picture aside, since it confuses the issue.QCOM would dearly love to sell their ASIC's to Chinese OEM companies. In this case QCOM needs China more than China needs QCOM - which is what we are talking about isn't it?>> Level play field is the issue. <<These studies are based on assumptions regarding capacity. If you look at simply establishing coverage, GSM is cheaper. Development costs were amortised years ago. Of course, capacity is a trade-off when considering GSM vs CDMA, but is Capacity really an issue for the Chinese? Europe is doing pretty well without CDMA.>> Capacity not an issue? Actually in some cities in Europe, like Paris, have severe capacity problems. Not only that they have thrown up so many cells that there is tons of noise pollution. Given that major cities in China dwarf the population of any European city capacity should be an issue. <<Which is why QCOM could not make any money out of their handset (or infra) divisions.>> Economies of scale and manufacturing costs are big factors. <<Network planning has to be much more precise with CDMA, as Australian Operators are finding out at the moment.>> I believe it as more to do with who is doing the planning than the difficulty of it.

To: w molloy who wrote (6830)	2/25/2000 8:33:00 AM
From: Clarksterh	Read Replies (1) \| Respond to of 13582

WM - These studies are based on assumptions regarding capacity. If you look at simply establishing coverage, GSM is cheaper. Development costs were amortised years ago. Of course, capacity is a trade-off when considering GSM vs CDMA, but is Capacity really an issue for the Chinese? Europe is doing pretty well without CDMA. First, it isn;t clear here what you are arguing: GSM operators have already paid for their infrastructure? or In extremely low user density areas GSM is more cost effective then CDMA? If the former, I disagree. Do you really think that in 10 years GSM will not have had to install 10 times the infrastructure that they currently have? And that this cell splitting will be substantially more expensive than just buying CDMA now, with its higher capacity, and easier topology problems (although I don't want to imply that the topology problems are non-existant). It all depends on your time horizon. If the time horizon is short enough we would have never made to jump from analog to digital of any form, but that is hardly a realistic analysis. If the latter, then I agree, as long as we are talking areas where there is an expected need for fewer than ~100 erlangs per several hundred square miles. But how common is that, even in China? Is anybody going to let these really low density areas determine what kind of equipment they install? I doubt it, and if they do, they deserve what they get in ROI. And, no, Australia is not a counter example. Network planning has to be much more precise with CDMA, as Australian Operators are finding out at the moment. First, what does this mean? Site locating? Frequency planning? Cell tuning for handoff, ...? Second, almost regardless of what it means, I disagree. CDMA 'network planning' is in all cases, including those above, either substantially the same or easier than GSM. And in addition, I have heard of no 'network planning' problems coming out of Australia. The only problems appear to be one of switchover. People who used to have coverage in some rural areas now do not and vis versa. This causes public relations problems, but would occur in any switchover of any kind. If you have other information, please enlighten. Clark