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To: Boplicity who wrote (10471)	2/19/2001 11:39:32 PM
From: McNabb Brothers	Read Replies (1) \| Respond to of 13572

Greg, This is nice reading on JNPR. I like how they are not cocky at all and trying to keep a low profile. eb-mag.com Hank

To: Boplicity who wrote (10471)	2/20/2001 2:19:29 AM
From: Jorj X Mckie	Read Replies (1) \| Respond to of 13572

Greg, I think that much of the view of the failure of B2C is that we tend to think about it only in the context of pure play companies that started with no existing distribution infrastructure AND most importantly, that are publicly traded. As an example, Amazon took the strategy that market share was more important than profitability. Perhaps ill conceived, but I don't think that the whole B2C model should be judged on the most visible publicly traded companies. I believe that the last mile broadband build out is the key to the success of the internet. There are new techniques for deploying fiber that are faster and cheaper than traditional methods. Additionally, we may see other players who are not currently associated telecommmunications services jump into the fray. Anybody who has the right of way into your home is a candidate (I am thinking local power utilities). The Japanese government is helping to fund the fiber to the home buildout as a way to stimulate the economy. I believe that the ramifications of this will extend beyond the Japanese borders. But as long as U.S. telecommunications companies continue to hold on to their current business models, it will be difficult to move forward. The service providers will need to provide multiple services over one high speed connection for this to be justified. The usage based billing model that generates the vast majority of revenues is a loser going forward and the telcos will be reluctant to give that up. Though, every time that telcos have been given an opportunity to move away from tariffed services, they have jumped on it. I don't buy the bandwidth glut argument either. Just because there is dark fiber in the ground doesn't mean that this should be counted as the existing bandwidth capacity. One thing that was pointed out to me today was that the contract manufacturers are doing pretty good in this market, despite all of the negativity. This, of course because the CMs cut costs right off the bottom line. The other part of that story is that the best model for the CMs has them connected to their customer through an extranet connection. Lots of explorers out there with arrows in their backs, but they blazed a decent trail....at least so that the settlers can move out and avoid the dangerous paths that were taken by the explorers. I still think that the best is yet to come.

To: Boplicity who wrote (10471)	2/20/2001 11:27:55 AM
From: slacker711	Read Replies (1) \| Respond to of 13572

3. The Cellular sector has reached nirvana and has bet on something that is too costly and will come too late to revive it. I've been following the recent discussion over the state of the world telecom industry with interest....just want to comment on the sector I know best, wireless. Over the last couple of months it seems to have become gospel that the wireless operators overspent for the 3G spectrum in the UK, Germany and Italy. The recent statement by BT's CEO that they overspent on 3G spectrum by $10B has added fuel to the fire. However, it is always interesting to look at the numbers underlying these arguments..... British Telecom spent $5.77 Billion on the UK spectrum auction. This gave them the right to the spectrum (I think it was 2 10MHz blocks...) for twenty years starting on Jan. 1st 2002. BT currently has 10.244m customers on their nationwide GSM network. If we take the conservative assumption that any incremental penetration over the next twenty years would go to the new operator on the UK market (this is obviously very conservative)....the spectrum works out to a cost of $2.40 per month per current BT customer. However this calculation neglects the cost of the 3G infrastructure build-out. I believe that the original projections were for around $5B (though these numbers have come down). This would add another $2.08 to the monthly bill. Obviously, the above calculations are simplistic....particuarly since they avoid the issue of interest on the accumulated debt. However, for a ball-park figure of around $5/per customer/per month, it seems to me that BT and the other wireless providers should be able to provide services which more than pay for the actual cost of the spectrum. Thus far, a wireless connection has proven to be one of the things that consumers are more than willing to pay for (witness PCS's $60 ARPU on voice services alone). JMO....but the advent of data services to supplement the current voice services is likely to drive average revenue per user well in excess of $5/month. Another thing I have noticed, over the last six months or so, are more frequent references to the fact that spectrum in current GSM bands is beginning to run out in Europe. These types of statements were nowhere to be found a year ago. A spectrum shortage in current frequency bands would only emphasize the advantage that the companies with 3G spectrum will have over 2G incumbents. Slacker