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

To: DaveMG who wrote (9324)	3/30/2001 2:28:31 PM
From: cfoe	Respond to of 196652

Interesting interview from TSC.. thestreet.com Yes, Definitely worth reading for anyone invested in Telecom. Some points he makes at the end about 3G buildout costs could play in QCOM's favor in EU.

To: DaveMG who wrote (9324)	3/30/2001 2:33:36 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 196652

Dave, many thanks for the link to that great TSC article. Sizing up wireless service providers, Vodafone still has a better balance sheet than most, although its current stock price reflects the addition of huge amounts of debt and earnings dilution from more shares. The fact that Vodafone is near its maximum limit as far as debt is concerned in the short run argues against an attempt by VOD to buy the remaining part of Verizon Wireless. For an example of the other extreme--no debt whatsoever for a wired/wireless service provider, take a look at Montana Power (MTP), soon to be renamed TouchAmerica. The company started out as an electric utility company, headquartered in Butte, MT, with hydro, coal, oil and gas generation facilities. It sold off all its utility assets but kept the right of way under the electric lines and along the gas pipelines, using that land to lay fiber optic lines. It now has 26,000 miles of fiber optic lines, mostly in the western half of the country, plus some wireless facilities, all of which are now functioning without any long term debt whatosever. And unlike the high price earnings ratios commanded by debt laden companies (for what reason I don't know), MTP currently has a PE near 12. Go figure. Art

To: DaveMG who wrote (9324)	3/31/2001 12:20:06 AM
From: JGoren	Read Replies (1) \| Respond to of 196652

absolutely superb article Dave. thanks. i learned a lot. thestreet.com We really need to discuss how the scenario impacts Qcom and spinco. It seems to me that our fearless leader, Ramsey, was right to be very concerned over the cost of spectrum. I was very surprised to learn that spectrum cost and infra cost are about equal. Obviously, capital spending to build out networks will slow substantially. That has little impact on Spinco, because there are few chips that go into infra. But, the royalty impact on Classic Q could be substantial. On the other hand, the carriers will have to look carefully at the cost of their systems. If I were a carrier I would look to jettison my expensive spectrum and utilize what I have better--great for Qcom. Forgetting 3G for a moment, 1x would seem the way to go. It increases capacity; it allows the carrier to put more subs on existing spectrum, it allows more profitable services to be added and increases the profitability, which can go to reduce debt. Qcom's statements at the annual meeting that carriers in Europe may want to go 1x on their existing spectrum makes a lot of sense. Why, then, do we see so much effort and verbiage being directed at the need for spectrum (as well as the need for adjustment in price)? What I would love to see from Qcom or someone else is an analysis of the cost of 1x tied to expected increases in subs and revenues from those subs in a way that shows how the carriers can grow and pay off their existing debt. What we have seen so far is a comparison of the cost of transmitting data. If the guy is correct that a bunch of bankruptcies loom down the road in 2003-04, the whole telecom market is gonna continue to suffer for five years.