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

To: foundation who wrote (4515)	11/13/2000 12:20:53 PM
From: Eric L	Respond to of 196493

Re: NTT DoCoMo >> Japan Plans Major Overhaul Of NTT Jon Herskovitz Reuters 13 November 2000 Japan is considering a plan that would cut the stake Nippon Telegraph and Telephone Corp holds in its cash-cow, mobile telecoms company NTT DoCoMo Inc, Japanese media reported on Saturday. The drastic overhaul would vastly expand the independence of NTT DoCoMo, the world's second biggest mobile telecoms firm, giving it far greater autonomy in negotiating the overseas expansion it sees as essential for its future strategy. NTT, the former government-controlled telecoms monopoly, would also lower the stake it has in long distance carrier and tech-oriented, NTT Communications Corp, to promote lower rates and a proliferation of services, the Nihon Keizai Shimbun and Yomiuri Shimbun newspapers reported. The Telecommunications Council, an advisory body to the Minister of Posts and Telecommunications, will likely make its final recommendations on the NTT overhaul plan by the end of the year, the Nikkei said. The measure could be considered as early as in a parliament session that starts in January, the newspaper said. The first set of recommendations from the council are expected to be made public next Thursday, it said, adding that the posts ministry will propose changes in current laws based on those recommendations. STAKE BELOW 50 PERCENT NTT would be required to reduce its stake in NTT DoCoMo to less than 50 percent. It currently controls 67.1 percent of the innovative company that has built its reputation as the provider of the world's first Internet-enabled, commercial cellular phone service - the i-mode. The plan would also require NTT to cut its stake in wholly owned unit NTT Communications to less than 50 percent. NTT Communications deals primarily in long distance and Internet services. The telecommunications panel was set up to overhaul the law covering NTT within two years, but this timetable has been greatly accelerated to increase competition in the telecoms field, partly because changes in the industry have been so fast. The government has become increasingly willing to allow greater competition in the telecoms sector, which it hopes will help to revive the economy and put Japan at the forefront of technology innovation. NTT has long resisted such cuts in its stakes because NTT DoCoMo's mobile business generates 36 percent of its profits. Revenue from NTT's fixed line business accounts for 54 percent, and has been generating smaller margins due to increases in other high speed Internet access connections. NTT Docomo's mid-year earnings are due on Tuesday. TRADEOFF FOR NTT TOO The council was expected to recommend a tradeoff in which two regional carriers created in NTT's last major overhaul in July 1999 - NTT East Corp and NTT West Corp - will be allowed to enter new growth fields, such as the Internet, satellite broadcasting and cable television. NTT would also be allowed to purchase stakes and acquire companies that manufacture telecoms equipment, the Nikkei said. NTT DoCoMo has been seeking a greater degree of independence so that it can pursue international alliances and take its Internet-enabled i-mode mobile phone service to major telecoms markets. In September, NTT Communications hinted that it might be ready to be spun off from NTT when it said an initial public offering remained one option for raising funds, although it was not at the time considering such a move. NTT and posts ministry officials could not be reached immediately for comment due to the weekend holiday. << - Eric -

To: foundation who wrote (4515)	11/14/2000 12:16:54 PM
From: Pierre	Read Replies (1) \| Respond to of 196493

... It's possible these boys can't afford to do anything other than follow this rutted road... Rather sad... EDGE by end of 2001 - oh my! Ben, I'm concerned about that very possibility. I posed a similar question from a more global perspective when I questioned whether the debt load from the spectrum auctions in Europe would delay roll out of 3G. I can see Cingular, and AWE - both salivating over the profits generated by DOCOMO - finding GSM an attractive solution. Both are marginalized with TDMA, but GSM puts them back in the mainstream. Perhaps the thinking is that by staying with a technology, outmoded though it may be, that commands 80% of the world market they are guaranteed a solution that will satisfy users for several years. It will also give them the economies of scale that GSM does provide in terms of handsets. Couldn't one conclude that given a cell phone's, or even a PDA's, limited use as a web surfing machine, that plenty of sexy applications will be available to GSM users for some years to come? In other words, absent the introduction of some killer app that absolutely demands greater data capacity than GSM can provide, won't consumers be pretty happy with a GSM data enabled phone? Certainly DOCOMO users are. I agree that KDDI's launch of 1x will be pretty instructive. It may be that the extra data capacity is so superior that people will switch. But if not, if its just the same functions delivered at a faster rate - I wonder if it's enough to drive the carriers to upgrade. Another concern I have is that the very expensive spectrum allocated in Europe, which I thought was reserved for 3G only, might be made available for traditional GSM build out. That would address the capacity constraints that urban areas are experiencing and allow the carriers to begin generating revenues from the new spectrum very quickly. If sexy, albeit limited, uses for data are made available on GSM (a la iMode) that may be enough to keep consumers happy for several years to come. I admit this may be a worse case scenario, but if there is no consumer driven need to upgrade then I can see 3G delayed for some time. China becomes an even larger piece of the puzzle then. If Europe stays GSM for the foreseeable future (2 - 3 years?) and Cingular and AWE join the GSM crowd, then China becomes the only huge growth arena in the short term. I'm not exactly trying to make a case for this scenario, but the announcement from Cingular troubles me. Hence, I'm trying to get a "big picture" view. If that view does not include 3G adoption relatively quickly, then perhaps the short term optimism for Q* share price rebound is misplaced. You seem very well attuned to the "harmonization" efforts so I wanted to run this possibility by you. From what you are seeing, could 3G deployment be significantly delayed, if for no other reason, because it costs too much in the short term? Pierre