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To: slacker711 who wrote (106355)	10/6/2001 2:12:04 PM
From: pcstel	Read Replies (1) \| Respond to of 152472

slacker: This would be the case if all of the operators used the same technology... Well, if all the operators used the same technology.. Then there would be a floor in pricing.. Supply and Demand would prevail. Like oil or another commodity! OPEC maintains strict supply margins to keep the price of the commodity at a certain level. Let's say $26 a barrel. If they cut supply to much the price would escalate and other forms of oil extraction become viable. Like the GSM world.. All the operators have near the same X amount of capacity. And Y amount of demand.. They want to yield the greatest amount of money on their given capacity.. If one operator suddenly had 4X the capacity of the others and cut rates by 75%. Who would reap the benefit.. Well, the consumer would of course.. But, both companies would be harmed in the long run.. The company with 4X the capacity may receive a short term windfall.. But as the other competitor lowered their per minute tariffs in order to compete with the first. Their profitability would suffer.. Then when it comes to the point where it becomes obvious that they need "Extra Capacity" just to stay even. They realize that the capital costs of the network upgrade would result in no gain in profits! Dumping excess supply on the market is bad for everyone! The prices ARE going to drop to 1/4 per MOU....the question is if Nextel has the infrastructure to support the increased capacity that will be required when MOU's rise dramatically Yes, Exactly my point.. price per MOU drops by a factor of 75%.. People use 4X the MOU.. Net result for the operator is a loss.. Due to cost on network upgrades. So you spend Billions to maintain flat ARPU!! Doesn't sound to appealing as an investment!!! Sounds like a commodity to me! Maybe they can get some subsidies from the government like farmers do? We saw the same thing in Data! Cost per Megabyte of Data got so cheap that every Mom and Pop decided they could make money being an ISP. Cisco's sales soared.. Data became a commodity.. Heck, companies were even giving away internet access for FREE! (Subsidized by on screen advertising!! Hey, did you know the LWIN is/will soon be delivering this type of "special offers that can save them money." aka as advertising when you make a phone call on their system?) leapwireless.com "and Slice can help them keep current on the local ballgame, the next free outdoor concert and soon, special offers that can save them money.” The local Mom and Pop ISP died! The stronger Regionals got acquired! Consolidation is the next round for Wireless Operators! JMO, PCSTEL