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

To: Ramsey Su who wrote (19159)	2/16/2002 8:16:14 PM
From: brational	Read Replies (1) \| Respond to of 196444

Ramsey, scary prospects indeed. 1. Here are more symptoms, from Financial Times-- about the growing rift between France Telecom and its German 3G license owner Mobilcom: news.ft.com In financial terms, the deal has been disastrous. Now worth about E350m, the stake is in France Telecom's books at E3.5bn. Mr Bon is expected to write it down by E3bn in the March 20 results. More problematic still is that France Telecom is committed to bankrolling Mobilcom through to its launch of 3G services, even though the companies are in fundamental disagreement over the business plan. Mr Schmid last week presented a new plan - still rejected by France Telecom - which brought forward the ebitda breakeven date to 2004 from 2005. Like many analysts, Mr Bon is sceptical of Mobilcom's ability to reach its profit objectives in the most crowded 3G mobile phone market in Europe. Germany has six UMTS licence-holders, including two large incumbent operators: Vodafone and Deutsche Telekom's T-Mobile. Mr Bon favours a considerably more cautious investment programme than Mr Schmid. France Telecom has in recent days been talking of initial investment of just "hundreds of millions of euros", while Mr Schmid has pencilled an eye-popping E11.3bn investment programme for 2002-10. He has also claimed he has a letter from France Telecom committing it to investing E10bn and limiting its ability to wriggle out of its financing obligation. 2. Financial Times website also maintains a tally of 3G licenses and system deployment dates (of course they don't recognize current South Korean deployment as 3G-- following Korean's own licensure procedures and terminology). news.ft.com 3. Europe though has a long tradition of unprofitable and uneconomical public infrastructure investment. I suspect we'll see more of the following: a. Return/rebate of license fees to winners in certain countries, like we saw in France (after Bouygues renegged). b. Relaxation of certain requirements, like dates, coverage, etc... c. More infrastructure sharing deals, leading to consolidation/exit of certain players. I doubt we'll have more than two or three major 3G players in any one country. d. Emergence of efficient niche players, if government cooperates... this might open the door for 1X EV-DO. I would expect for some kind of announcement/breakthrough on the UMTS front at the GSM conference in Cannes. I'm also increasingly convinced Qualcomm will have a growing role to play in Europe.

To: Ramsey Su who wrote (19159)	2/17/2002 11:30:39 AM
From: David E. Taylor	Read Replies (2) \| Respond to of 196444

Ramsey: I am beginning to think that Europe has already committed themselves to a 3G financial model that is doomed from the start. I don't know about that - if they believe their own studies, they think that 3G services represent a $1 trillion market over the next 10 years (and that's just the GSM/UMTS part): umts-forum.org I'm not saying that this "white paper" is correct, since it estimates potential revenues from different types of 3G services which are not yet available, and compelling 3G services of the type described that users will actually pay a premium over voice service for will not be evident until the SP's start testing the markets with them. But, the SP's must believe the market potential is there to recoup their license and network deployment costs. David T.