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

To: Ramsey Su who wrote (6879)	2/2/2001 6:11:53 PM
From: Eric L	Read Replies (2) \| Respond to of 196543

Re: MAJOR Brazil News Comment: I was in a deep funk for about two weeks after Anatel's spectrum decision was announced last June ... some may think the decision did not have major impact on the technology game ... I did ... so this one pleases me, I have to admit. I can not wait to post this to Tero, and please don't anyone deprive me of that pleasure. >> Brazilian Wireless Auction Suspended February 2, 2001 SAO PAULO, Brazil (AP) -- Brazil's telecommunications regulator Anatel said Friday it had suspended next week's planned auction for the first three of nine new licenses due to a lack of bidders. Analysts said the agency had asked too high a price, chosen the wrong technology and -- most importantly -- got its timing wrong. Anatel President Renato Guerreiro told a news conference in the federal capital, Brasilia, that the sale would not take place as slated next Tuesday. But he said auctions for the second and third groups of three licenses would go ahead as planned Feb. 20 and March 13 respectively. The three groups of licenses are known here, respectively, as Bands C, D and E. The Band C licenses were priced higher than those for Bands D and E because they were to start operating in July, six months ahead of the other two bands. That was supposed to allow holders to establish market share before facing fresh competition. ``This is not what we wanted,'' Guerreiro said Thursday after only one sealed envelope containing a non-valid bid for Band C was submitted. ``We were expecting more participants.'' The suspension was a blow to Anatel's hopes of redrawing the map of Brazil's national wireless coverage and to the government's expectations of collecting at least $2.4 billion for the nine new concessions. Anatel was asking minimums of between $270 million and $500 million for each of the licenses, depending on the size and population of their operating region. Guerreiro insisted Thursday that the minimum prices had been calculated with ``absolute precision.'' But others said they were too high given the current retrenching in the world telecom market, and had scared off major wireless players such as France Telecom and Britain's Vodafone. ``If they had held the auction a year ago, things would have been much easier,'' said Mirella Rappaport, telecoms analyst at ABN-Amro in Sao Paulo. ``There was much more capital available and investors weren't even doing calculations on returns.'' No longer. The telecom sector, financially stretched from expansion and sky-high prices in the first European auctions of the most advanced licenses, is suffering a serious hangover. Anatel has also been criticized for putting Brazil's new licenses on the frequency used by European technology rather than the frequency already used by Brazil's existing wireless licenses. ``There's a window of opportunity here,'' said Rappaport. ``The more time passes, the less interesting Band C looks. There's a reluctance to invest in technology that will soon be outdated, especially if you're not in the market already.'' Guerreiro said Anatel will again try to sell the Band C licenses in the first half of this year, maybe at a lower minimum price. Guerreiro confirmed there were seven bids each for the auctions for Bands D and E but with many bidders participating in both bands, premiums are not expected to be high. All participants in those auctions are already operating some telecommunications service in Brazil. << - Eric -

To: Ramsey Su who wrote (6879)	2/3/2001 8:41:44 AM
From: Webster	Read Replies (2) \| Respond to of 196543

Most Honorable Ramsey Su, I believe there are several major factors which have influenced NOK's past strategy regarding cdma. I also believe that Jorma is concerned about the future of NOK as the cdma competitive environment has significantly changed. As those analysts say, past performance is not necessarily an indicator of future success. This represents only my opinion and may conflict with many others. I believe in five years, the NOK story will be told in future MBA classes as the most recent decline of a major company, along with Europe's decline as a wireless leader. I think that NOK is in the second phase of their cdma strategy with the first phase ending (12-31-98) in complete failure. First let me say that NOK has done a brilliant job in the 1980's and 1990's with GSM, building world class phone manufacturing, brand name along with financial performance. With regards to their cdma strategy, I believe that NOK's past success has cause them their biggest problems. They missed their opportunity back in 1995 through 1998 to build their cdma foundation that would continue their world dominance for at least another decade. NOK suffered from the same success that MOT achieved with analog phones. Analog has seen a steady decline and will will one day be a memory. GSM and TDMA will have a similar fate. Sure GSM will be around perhaps for another ten years, but I wouldn't be planning any sequential growth from it. Since NOK is the number one brand in GSM handsets, they looked to their historic success to determine their future course of action with cdma. I believe NOK over looked their most important historic strength (not their pride) and that was their vision. When MOT was number one in analog phones, NOK was planning their GSM strategy by looking into the future as "what can be." Today I believe that MOT is in a similar class with AWE as one of the few unnecessary companies in wireless. NOK could suffer from this similar fate. NOK's biggest strength today is their brand name. I do not see them as a technology company nor a phone manufacturer. NOK is now chasing technology as a result of QCOM's significant lead in asic development. QCOM is reducing the bill of material with their asic, and increasing the applications they write on their asics. QCOM has changed the competitive environment with cdma by licensing many new entrants for devices as well as placing them all on a similar competitive playing field with royalties in the 5% range. They also provide a smooth transition in asic features so manufacturers can easily upgrade without major design changes. As a result of QCOM's presence in cdma there is and will continue to be significantly more competition in all aspects of cdma handsets as will there be with wireless appliances. If I was Jorma, I might get out of manufacturing of cdma handsets and build the brand name. I might also take the stand that NOK doesn't care which brand of cdma their customers choose as long as they move forward. Keep the gsm production line going for as long as possible. In a few years as GSM declines you can keep the local EU people working as some type of protectionism will inevitably be in place. I think that QCOM can help NOK become the number one brand name in cdma. They will also allow NOK to save face in the process of signing a 3G license. As long as NOK looks to the past their vision with regards to cdma will be clouded. FWIW. Thanks Web.