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

To: Art Bechhoefer who wrote (3164)	9/17/2000 7:22:01 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 196725

No, it's not contradictory. Remember, 3 Bucks Full! One for the master [the government], one for the dame [Q!] and one for the little boy who lived down the lane [Service Providers]. If Q! or the government give away some of what they own, the other two will take it. Or if two of them give it away as in the case of beauty contests without buildout requirements then the other will grab the profits. Q! is now stuck, committed and locked-in to royalty deals so they can't raise their royalties much, even for new entrants or the new entrant won't be able to compete with earlier entrants and will simply not buy a licence. If Q! cuts the royalty, the spectrum will sell at higher prices and the end price per minute to WWeb subscribers won't change. If Q! gives away the technology, the end price to WWeb users won't change but governments will get more money for spectrum. If technology costs drop to zero because of competition and technology developments and Q! gives away their intellectual property instead of charging royalties and the governments have already given the spectrum away to the service providers, then the price per minute to WWeb users will NOT go down. It will simply mean more profit for the service providers. The key point is that spectrum is limited and every photon can only be used once and it will be sold to the highest bidder! Service Providers will raise the price of the service so that they maximize their income which will mean keeping the price high enough so that there is no huge 'busy signal' problem. No contradiction. This is all about spectrum shortage. Which, going back 11 years, is what Q! set out to reduce and has succeeded mightily in doing and far, far more importantly than almost anybody thought [because the WWeb was barely a glimmer in anyone's eye in 1990]. Mqurice PS: Edit..maybe I got master and dame reversed. Doesn't matter though.

To: Art Bechhoefer who wrote (3164)	9/17/2000 7:34:33 PM
From: Maurice Winn	Respond to of 196725

<Although many of us think the current royalty rates constitute an offer no rational service provider could refuse, the fact is that some still refuse!> Actually, NONE are refusing. ALL are going to use CDMA in 3G. Yes, there have been refusals in legacy networks. China was underway with GSM so continued with it because the hardware costs were presumably so cheap for 2G that the spectrum saving wasn't important enough to switch to CDMA for 2G. Their alternative was to ditch GSM and go all CDMA. They will surely have considered doing that. Bombings and the like won't have helped the considerations. They'll go CDMA, it's just a matter of when. When and how. Also, there has to be enough profit for a licensee. They might think that there are so many competitors on low margins that there is not enough in it! That's why Nokia won't be charged 100% royalty. They would simply stay out of the market and live for a while on GSM or keep trying to make CDMA work in 2G for which they have licences. Mqurice