Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Jon Koplik who wrote (723)	7/12/2000 10:12:49 AM
From: slacker711	Respond to of 197675

Details from Korea.... biz.yahoo.com Consortium key criteria for Korea's 3G licensing By Nam In-soo SEOUL, July 12 (Reuters) - South Korea's Ministry of Information and Communication said on Wednesday forming a consortium would be a key licensing criterion in the selection of next-generation mobile service providers. ``You may apply for a licence as a single company. But if you don't form a consortium with other telecom firms and equipment makers, you may drop out of the race,'' Minister Ahn Byung-yub told a press conference. The ministry later announced it had decided to award three licences for providing third-generation (3G) mobile phone services, called IMT-2000, which allow global roaming, higher-speed Internet access, multimedia and real-time video-conferencing. It plans to select the successful candidates by the end of this year. ``To avoid duplicate and excessive investment, the government decided to limit the number of the licences to three,'' Minister Ahn said. OPERATORS TO SELECT TECHNOLOGY STANDARD Ahn said the government would leave operators to decide on which technology standard they would adopt for the mobile services. ``The government does not intend to influence any operators in selecting a technology standard for their mobile services,'' the minister told reporters. During a recent public hearing, all three of the nation's leading contenders for the 3G licences -- SK Telecom , Korea Telecom and unlisted LG Telecom -- stated they preferred W-CDMA technology over cdma2000 for the advanced mobile system. ``W-CDMA is definitely the more dominant 3G technology in the world, meaning it allows subscribers to have access to a global roaming service sooner than the other technology,'' said a spokesman for SK Telecom, Korea's largest mobile carrier. W-CDMA (wideband code division multiple access) technology, developed by Nokia and Ericcson , is a mobile phone system that competes with Qualcomm's (NasdaqNM:QCOM - news) cdma2000 for the global wireless services. Qualcomm shares fell sharply last week on news that Korean telecom firms were not in favour of its technology. But analysts said the statement by the three companies was not their final decision. ``Note that the formal applications for 3G licences will not be made until the end of September. We believe there could be some cdma2000 representation in Korea in the end,'' said Merrill Lynch in a recent report. Brian Yang, a telecom analyst at Shinhan Securities agreed saying: ``Korea, which has 26 million wireless telephone users, is the world's first that commercialised the cdma2000 technology and has larger numbers of subscribers to the system than in other countries. The government will not just let all the operators adopt the W-CDMA system.'' He said Korea Telecom, in which the government has a majority 59 percent stake, would be one of the most likely candidates that would eventually go with cdma2000. Shares in SK Telecom ended down 2,500 won at 364,500 on Wednesday, while Korea Telecom gained 1,100 won at 93,000. LICENCE FEES TOO COSTLY The ministry said it set a bid ceiling at 1.3 trillion won ($1.17 billion) and floor of one trillion won to avert a bidding war. But analysts said telecom firms would suffer if they had to pay such a high price, especially if they had the added burden of infrastructure costs. ``At over one trillion won, operators are likely to see their break-even point delayed by a year or two,'' said Yang at Shinhan Securities. He said the fees dwarf estimates for initial annual revenues expected from the services -- which the state-run Korea Information Society Development Institute has estimated at a combined 328.3 billion won in 2002 and 422.4 billion won by 2004. The attraction for IMT-2000, which is expected to begin commercial operation by early 2002 in Korea, is an estimated 10 million subscribers by 2005 and 20 million by 2009. Successful candidates would be required to pay half the fees up-front, with the rest over 10 years. ``The heavy licence fees could lead to higher subscription rates, smaller subscribers and a drop in share prices for the operators eventually,'' said Yang. ($1 equals 1116.0 Won)