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

To: A.J. Mullen who wrote (12169)	6/28/2001 6:09:32 AM
From: Maurice Winn	Respond to of 196852

AJ, <I don't know how or why they're able to stump up the money now. I certainly don't see why they should be able to extract a higher price for spectrum than the FCC, unless they can identify some "must-have" chunks that have a very high value for just one operator.> I think they are only able to stump up the money now, because the shareholders realize that the spectrum is in fact worth something like $10bn rather than the $1bn they hoped to have to pay in a bankruptcy reorganisation. When there is prospect of turning $1 notes into $10 notes, it isn't long before 'investors' appear. You might reasonably call them speculators. Leap's share price might have dropped when the fake re-auction was cancelled [by the court] and that's indicative of the difficulty everyone has in valuing spectrum. We can reasonably assume it's somewhere between $1bn and $17 billion. Quite a wide spread. Nextwave's original bid was for about $4.3bn for 110 million pops [or thereabouts anyway]. They got a bit more after the auction in 1996 which increased their pops a bit. I think the re-auction which resulted in bids of $17 billion was just for Nextwave's spectrum, but perhaps there were some surrendered licences too. The value lost by QUALCOMM to the governments [by undercharging for royalties] is determined by the next most valuable use of the spectrum after CDMA. GSM is about a third the spectrum efficiency, so that sets a limit on how much Q! could charge - too much and people would instal GSM instead of CDMA in that spectrum. Mqurice