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To: tero kuittinen who wrote (19767)	3/11/2000 11:41:00 AM
From: Uncle Frank	Read Replies (2) \| Respond to of 54805

>> The idea of setting up a competing second generation network in the autumn of the year 2000 makes no sense whatsoever. GSM has 20% market penetration in Chinese urban population; game over. I think the impetus for change will be hdr, where cdma has a demonstrated solution and gsm is apparently still in the lab. The technical issues have been discussed in detail on the qualcomm threads, but if I am to believe credible technologists like Clark Hare and Engineer, the patchwork solutions the gsm camp has proposed for hdr and 3G are much less effective and more costly to implement than Qualcomm's approach. I don't know if you attended or listened to the broadcast of the shareholders' meeting, but Dr. J focused on this issue, and I clearly see it as the key for cdma's rapid expansion. uf

To: tero kuittinen who wrote (19767)	3/11/2000 11:47:00 AM
From: r.edwards	Respond to of 54805

Tero, apparently it is Not hype, A Billion Callers By 2002 Global wireless telephony is growing at 25 to 30 percent annually while total minutes of mobile usage are climbing even faster at 45 percent. Previously, it was widely held that the number of wireless subscribers worldwide would not reach 1 billion until 2003. We forecast that total subscribers will reach 1 billion by 2002. With this new projection, the compound annual growth rate for subscribers over the next five years increases to 35 percent from 29 percent. Obviously, as wireless networks proliferate and airtime costs decline, worldwide penetration rates will increase. Revised projections also imply that along with strong subscriber growth handset sales will grow at 45 percent over the next five years. Over the course of 2000 to 2002, we project that more than 1.8 billion handsets will have been sold. This figure indicates that nearly 900 million more units will be sold, based on the new 1 billion subscriber by 2002 scenario. With this anticipated increase in demand for wireless telephony, significant additional networks and equipment will be required. According to the Yankee Group, consumers, rather than businesses, will make the majority of buying decisions and will choose providers based primarily on cost. The Yankee Group Mobile User Survey also revealed the following: * 30 percent of wireless phone buyers purchased for security and safety, while 15 percent cited both business and personal reasons, and only 13 percent bought for mainly business reasons. * The number of households with multiple wireless phones is increasing. In 1998, only 28 percent of households had two or more phones. Already in 1999, that percentage has risen to 32 percent. * Cost and special promotions are the main determinants in choosing a wireless service. * Wireless is perceived as good and improvingð-a condition that the Yankee Group believes predicates wireline substitution. * Purchase decisions based on personal needs rather than business ones favor handset manufacturers that cater to customer preferences. We believe that existing second-generation technology will be used to accommodate the growth in subscribers. The acceleration in subscriber counts implies that the market will be expanding significantly ahead of the widespread availability of third-generation technology. (We do not anticipate widespread global deployments of 3G technologies until the end of 2003. The first commercial deployment of 3G is expected in Tokyo by the second quarter of 2001.) To accommodate the growing number of subscribers, we expect service providers to accelerate the expansion of existing networks. Service providers are now on the threshold of a significant expansion of network capacityðusing existing technologies such as GSM, TDMA and CDMA. Of the second-generation technology currently available, CDMA is the most cost and capacity efficient, in our opinion. As both capacity efficiency and cost of service are significant to service providers, we expect an increase in the demand for CDMA technology. Companies with technological advantages such as Qualcomm, the developer of CDMA technology, should benefit from the strong growth in the wireless market. Increasing subscriber counts are expected to encourage service providers to deploy CDMA at a faster rate than other technologies. In short, accelerated subscriber growth and evolving purchasing decisions are key developments for the wireless market. Also, according to the Yankee Group, mobile users believe that reducing service price, providing phone upgrades and improving coverage would be the main routes to improving customer loyalty. Given this environment, not only do companies need to have the additional network equipment to support new technologies, but they also need to design products that are available on various technology standards and that reflect customer needs. Pete Peterson is a wireless analyst at Prudential Volpe Technology Group in San Francisco.