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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 (19183)	2/17/2002 2:51:22 PM
From: David E. Taylor	Respond to of 196433

Ramsey: The report is available at: umts-forum.org As you might imagine, the $1 trillion (yes, US $) over ten years is back end loaded, and the revenues are small until 2004 when 3G adoption is projected to take off. The report estimates 134 million 3G UMTS users worldwide in 2005, 3G revenues at $68 billion, 3G ARPU at $42/month. By 2010, the number of 3G users is projected at 864 million, 3G revenues at $320 billion, ARPU at $31/month. Voice services are projected to be about one third of these revenues, and Asia Pacific leads the way in subs numbers. If their 3G subs projections prove out (and they don't seem unreasonable given the projected GSM/UMTS overall sub growths being bandied about), and the projected additional 3G services prove attractive to users, there's no reason to suppose these revenue numbers won't be achieved. As I said, they must be able to make a business case for 3G, even if it's only to themselves. David T.

To: Ramsey Su who wrote (19183)	2/17/2002 4:32:01 PM
From: Eric L	Respond to of 196433

Ramsey, << sometimes simple math is adequate. >> Sometimes it is not. <g> << $1 trillion, be it possibly EU instead of US$, is still a lot of money. >> "Revenue data is reported in current US dollars" << Let us assume there are going to be 100 million 3G UMTS subs average for the next 10 years, STARTING RIGHT NOW, which we know is far above reality >> The UMTS Forum would most certainly agree with you ("far from reality") which is why they plot their forecasted worldwide 3G adoption rate as an exponential curve that determines the rate of adoption of mobile subscribers that will use 3G networks and services. 3G Subs (millions): 2002 2003 2004 2005 2006 2007 2008 2009 2010 2.6 13.1 47.2 95.5 170.3 254.1 360.7 493.0 629.9* * 629.9 million = 28% of 2.25 billion worldwide mobile wireless subscribers forecasted for 2010 3G Revenue (including simple voice) in $Billions 2002 2003 2004 2005 2006 2007 2008 2009 2010 1.0 11.0 37.2 67.7 105.7 146.4 201.3 263.9 320.5 << With 100 million subs, that is $1,000 ARPU per annum just to meet that estimate >> If you follow the logic of the reports (#9, #13, #17) prepared by Telecompetition, Inc. for UMTS forum it works out to ARPU of $42.40 per month ($509 per annum if you will) in 2010 with the simple voice ARPU component significantly reduced and contributing $11.62 (per month) - less than half of what it will contribute in 2003. You could if you want quibble about the fact that although the reports include 3xRTT (which has been abandoned in favor of 1xEV-DV) in the 3G figures they do not include 1xRTT or at this stage 1xEV-DO. The revenue forecasts in this report refer specifically to services delivered to subscribers on 3G networks. 3G networks in this study are defined as those conforming to the IMT-2000 family of systems specifications. ... 1xRTT is not considered to be a 3G technology in this study. In August 2001, the ITU recognized 1XEV-DO as a 3G / IMT2000 standard, but final approval is not expected by the ITU until November 2001. This updated forecast does not consider the additional demand that might be created by the addition of this standard into the IMT2000 family. In addition, all of us that hold Qualcomm might hope that an adoption rate of 630 million for "3G" subs (exclusive of 1xRTT) out of 2.25 billion total subs is very conservative. << UMTS may have both of them beat, by a huge margin, with the wildest promises >> The forecasts look rather conservative to me, but in order to ascertain that, it really is important to drill down on the logic of the reports. In this case, your simplified math doen't work. <ggg> Best, - Eric -