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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 (663)	1/19/2004 8:18:59 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. <<<< 1.A Your estimate- high> $10 x 214M POPs yields $2.14B. Nationwide coverage ???? 1.B Your estimate- low> $6 x 214M POPs yields $1.28B Nationwide coverage ?????? I would imagine it would be a “no brainer” for AWE at $2B for nationwide WCDMA coverage. 2. Modoff’s 5/2002 “Dated Misinformation” 2.A. 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. 2.B. 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. 2.C. 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. 3 Unstrung article AT&T Sticks to Its Guns on UMTS 11.20.03 Snips>>>>>>>> San Francisco and Seattle and two other -- as yet unnamed -- cities in the U.S. in 2004. "We're completely committed to a four-city rollout of UMTS next year," says the spokesman. . Unstrung estimates that the installation will cost AT&T Wireless around $144 million in total (see AT&T Firms Up 3G Plans). $144M / 4 markets = $36 / market 75 markets = $2.7B AT&T Sticks to Its Guns on UMTS 11.20.03 AT&T Wireless Services Inc. (NYSE: AWE - message board) says that possible further layoffs at the company will not affect its planned rollout of UMTS third-generation (3G) technology next year. The Wall Street Journal reported today that the carrier plans 3,000 layoffs, over and above the 1,900 job cuts announced last week. A spokesman for the operator would not confirm the story but did say that more layoffs were possible as the firm works to improve its margins. "We considering all options," the spokesman told Unstrung. The firm currently employs 31,000 people in the U.S. Despite the cuts, the carrier is adamant that it will still roll out its first universal mobile telecommunications system (UMTS) networks in San Francisco and Seattle and two other -- as yet unnamed -- cities in the U.S. in 2004. "We're completely committed to a four-city rollout of UMTS next year," says the spokesman. UMTS is a 3G upgrade for AT&T's existing general system for mobile (GSM) network that uses a wideband CDMA (WCDMA) air interface to increase the data rate offered over the cellular network to a maximum of 2 Mbit/s (with a good, strong tailwind behind it). The carrier is using base stations from LM Ericsson (Nasdaq: ERICY - message board) and Nortel Networks Corp. (NYSE/Toronto: NT - message board) for the upgrade. Unstrung estimates that the installation will cost AT&T Wireless around $144 million in total (see AT&T Firms Up 3G Plans). The carrier has just announced its expected Enhanced Data for GSM Environments (EDGE) upgrade to its network (see AT&T Wireless Launches EDGE). This software upgrade for GSM base stations will offer subscribers increased data transfer speeds of a couple of hundred kilobits a second for faster downloads and multimedia services. Ericsson and Nokia Corp. (NYSE: NOK - message board) are supplying the code for this update, which should be complete by the middle of 2004. AT&T drastically scaled back its original plans for a 3G rollout last December. The operator initially said that it would have UMTS in 13 U.S. cities by the summer of 2004 (see AT&T Scales Back 3G). — Dan Jones, Senior Editor, Unstrung