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To: Eric L who wrote (2201)	4/15/2002 3:06:52 PM
From: Eric L	Respond to of 9255

re: Samuel May on 3G Growth May Coined The Acronym 2.75G ... I think Cahners In-Stat coined the term and May borrowed it. >> U.S. Bancorp Piper Jaffray Analyst Doesn't Expect Meaningful Worldwide 3G Growth Until 2005 Expects 2.5G and 2.75G Shelf-Life to be Longer Than Current Wall Street Predictions April 15, 2001 Press Release U.S. Bancorp Piper Jaffray In his new in-depth report, The Global 3G Report, U.S. Bancorp Piper Jaffray Senior Wireless Equipment Analyst Samuel May remains cautious on the rollout of high-speed packet-based third-generation (3G) wireless networks across the globe due to three main reasons: 1) The extended functionality of packet-switched 2.5G and 2.75G mobile networks. May Coined The Acronym 2.75G To Describe A Hardware Upgrade To Either A 2G Code Division Multiple Access (Cdma) 1Xrtt Network Or Global System For Communications (Gsm) Enhanced Data Rates For Global Evolution (Edge) Network. Both Networks Allow For Potentially Higher Data Throughput (Up To 144Kbps) Than 2.5G, Which Can Provide 30 To 40Kbps. 2) The initial high cost of 3G spectrum 3) The lack of a killer application to drive the need for the rollout. Rather, May believes that carriers will migrate from circuit-switched second-generation (2G) networks and pause at 2.5G and/or 2.75G networks. Additionally, he sees capital constraints, technology issues and slowing economies pushing out 3G deployments. ``Generally speaking, 2.5G and 2.75G technologies give carriers the opportunity to modify existing 2G infrastructure to provide low-bandwidth packet data services,'' says May. ``Since the cost of deploying 2.5G and 2.75G is generally less than upgrading to 3G, operators can test the viability of data plans on less expensive 2.5G networks before upgrading to 3G, and in turn mitigate capital expenditure risk. Along with the initial high cost of 3G spectrum and the lack of a 'killer application' to drive demand, the extended functionality of 2.5G/2.75G has prompted the delay in the deployment of 3G networks.'' In the 160-page report, May details that since 3G represents a significant product upgrade cycle, the acceptance of 3G equipment represents a sizable catalyst for the longer-term growth of wireless equipment providers. ``We believe the market opportunity for packet data services and advanced 3G multimedia applications is substantial,'' said May. ``However, capital constraints, technology issues and slowing economies are going to push out 3G deployments. We anticipate infrastructure spending to be down 6.5 percent in 2002 over 2001, and do not expect meaningful ramp in 3G builds until 2005, when the cost of deployment has come down and when carriers have been able to identify successful data plans.'' May believes that when 3G infrastructure spending picks up, Nokia Corporation , LM Ericsson,and Siemens will be the winners. Nokia -- ``We believe Nokia's steady sales in infrastructure suggest that the company captured GSM market share on the infrastructure side,'' said May. ``We expect infrastructure will represent approximately 22 percent of Nokia's $31.0 billion estimated revenue in 2002, up 2.2 percent annually in dollar terms.'' Ericsson -- ``We expect Ericsson to be a major beneficiary of a recovery in 3G equipment spending, although the OEM has had transition issues in light of its overt exposure to 2G equipment deployments,'' said May. Siemens -- ``We believe Siemens is poised to be a formidable competitor in the supply of W-CDMA infrastructure,'' said May. << - Eric -