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

To: Caxton Rhodes who wrote (12201)	6/28/2001 5:02:07 PM
From: Kent Rattey	Read Replies (1) \| Respond to of 196568

Telson is buying Martha Stewart Mitts to make the Q'3 deadline... Wireless Watch: The gift of sharing By Dan Briody Red Herring June 20, 2001 An extraordinary phenomenon has emerged between debt-ridden telecom companies struggling to pay for expensive next-generation wireless networks: sharing. Traditionally some of the fiercest competitors on the planet, British Telecom (NYSE: BTY) and Deutsche Telekom (NYSE: DT) have agreed to share the costs of building third-generation (3G) networks throughout Europe. And it's coming to America too. On the surface, sharing sounds like a decent and humane concept. They all have to build the same networks, so why not share the burden of paying for it? But this kind of thing plays out far better on the playground than it does in the globally competitive wireless marketplace. The impact of these arrangements will be felt all the way down the telecom food chain: equipment vendors like Nokia (NYSE: NOK), Ericsson (Nasdaq: ERICY), and Motorola (NYSE: MOT) expect to have their sales halved, wireless operators will find it impossible to differentiate their services on a shared network, and innovators and startups will get locked out of the market as larger competitors reduce their costs and increase their markets. But desperate times call for desperate measures, and rather than plunge the entire European telecom industry into bankruptcy, it's probably better that they just share. At least they are all using the same standard -- GSM -- anyway, which will make their telecom commune fairly easy to achieve from a technological standpoint. The U.S., however, is a completely different story. Between CDMA, GSM, TDMA, and other standards, it will be considerably more difficult for U.S. wireless carriers to share networks. In many cases, it will be impossible. And the Federal Communications Commission will have some anticompetitive concerns about this type of arrangement, as well they should. Wireless: Network sharing to invade U.S.? HOWDY, PARTNER Even Qualcomm (Nasdaq: QCOM) is starting to feel the love. At the 3G Congress, a wireless trade show in Hong Kong, Qualcomm executive vice president Paul Jacobs told attendees that 3G will foster a new spirit of partnership between wireless operators, application developers, and equipment vendors. Now before you bust out into a chorus of "Kumbayah," bear in mind that Qualcomm believes in partnership so long as the partners are using CDMA and writing applications for its Binary Runtime Environment for Wireless (BREW) platform. And thus far, the company has been able to build a considerable community around the BREW development platform, including Verizon (NYSE: VZ), KDDI in Japan, and KT Freetel in Korea. That's decent company, but BREW has a long way to go before it can be considered a standard. Qualcomm advancing toward 3G with partners The facts of the matter are that the overwhelming costs of building 3G networks were underestimated by most, if not all, of the players in the wireless industry. As a result, the first waves of consolidation are happening, and that is taking the form of partnerships and sharing of resources. Right now, those partnerships are happening among the biggest companies in the business, but the impact will be felt quickly on down the line. The real startup opportunity, however, lies in the company that can develop the technology that allows carriers to share networks, but still differentiate its service. That's a market worth watching. 1997-2001 Red Herring Communications. All Rights Reserved.