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Strategies & Market Trends : Gorilla and King Portfolio candidates - Moderated -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (657)	1/19/2004 12:35:16 PM
From: Crossy	Respond to of 2955

Eric, many thanx for your reply ... looks like the only "problem" for the CDMA camp is not technology but Qualcomm, trying to extract 8% royalties of everything. I guess, GSM and its inventors are a lot cheaper here.. rgrds CROSSY

To: Eric L who wrote (657)	1/19/2004 3:13:02 PM
From: Jim Mullens	Read Replies (1) \| Respond to of 2955

Re: AWE WCDMA cost, and “Not a lot has been detailed on that. AT&T Wireless, with a subscriber base of 22 million spent $15 to $18 per covered POP (~$3 Billion to date) to cover 214 million POPS from scratch with GSM/EDGE. My recall is that they estimate an additional $6 to $10 per covered POP to migrate from GSM/EDGE to 3GSM WCDMA. <<<< $10 x 214M POPs yields $2.14B. Brian Modoff of DB Securities had a different take in his “The Rise of the 3G Empire” report dated May 2002. Prices could have fallen since then, but ....... Snips for Modoff's report >>>>>>>>>> AT&T and WCDMA – What You Really Get for $1.5 billion AT&T Wireless has publicly stated that its total cost to deploy WCDMA will only be $1.5 billion. We took the bait and decided to see for ourselves what the total cost could be based upon our model, or conversely, what AT&T gets in return for spending $1.5 billion. One caveat in our forecast is that our modeling assumes AT&T uses 2000 MHz for its WCDMA service instead of 1900 MHz, which it will most likely use for 3G. Although the RF propagation at 1900 MHz is better than it is at 2000 MHz, it is not meaningful enough to significantly impact our results. For our MLC North America WCDMA forecast, we assume that AT&T deploys WCDMA for urban network coverage (up to 384 kbps at the cell edge) in the top 75 markets in the United States (less than 0.8% of the total landmass) by 2007. We also assume that by 2007, 5% of the U.S. landmass is under suburban coverage (at least 64 kbps), with miniscule rural coverage. Using our assumptions, AT&T provides coverage to only 6.7% of the total landmass of the United States. Oh yes, the total cost is an impressive $3.3 billion. We did one sensitivity scenario for AT&T in which we assume the operator covers 15.9% of the U.S., with urban-type coverage for 5% of the landmass and suburban coverage for 10% of landmass, the rest is rural coverage. In this scenario, the capex jumps to an impressive $13.2 billion and we have yet to factor in capacity requirements, let alone a much needed ramp in subscribers to foot the bill. So much for 384 kbps in Topeka, Kansas. From this quick sensitivity study, we believe that AT&T probably gave a realistic initial 3G capex forecast. However, the operator has neglected to reveal what type of coverage it really plans to offer, as well as the likely data rates possible throughout its network (not just while sitting under the base station. So what does AT&T receive for $1.5 billion in WCDMA capex? Based upon our model, and assuming suburban-like coverage (at least 64 kbps and up to 144 kbps at the cell edge), we estimate that the operator can only cover 4% of the land mass in North America.