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

To: tinkershaw who wrote (682)	2/1/2004 1:56:53 PM
From: rkral	Read Replies (1) \| Respond to of 2955

tinkershaw, re "The cost to upgrade the system to 3G WCDMA for AWE ... will be more expensive ... " AND "<IEDGE does not compete well with EV-DO, " I generally agree, except I'm not so sure about the costs. If AWE overlays WCDMA in the same spectrum, it should be able to use the same cell sites and might be able to merely upgrade the base station transceivers and the core network .. particularly since the GSM equipment is relatively new. However, since you originally wrote "AWE finds itself in trouble having the most antiquated network ", it appeared you were talking about the way things are now, not the way they might be in the future, and I posted accordingly. re "In sum AWE is not well positioned, and its losing customers is one very blatant red light in that regard." The loss of customers might be an operational problem, and not a technological one. If so, it's conceivable a new owner could turn that around in due time. Ron

To: tinkershaw who wrote (682)	2/1/2004 4:04:25 PM
From: Jim Mullens	Read Replies (1) \| Respond to of 2955

Tinker, Re: WCDMA deployment cost and your comment “ The cost to upgrade the system to 3G WCDMA for AWE, from what I understand, will be more expensive than it will be with most of its competitors and it will take many years. EDGE does not compete well with EV-DO, neither in product delivered nor cost-effectively for the deliverer. “ I believe you are correct, the cost for GSM carriers to implement WCDMA will be significantly more than for the CDMA carrier’s path to 3G. AWE has already begun that costly process moving from TDMA to GSM to GPRS and now EDGE (not sure nationwide deployment is complete as AWE states). Significant CAPEX has been expended, and now depreciation must be amortized against revenue thus lowering EPS. WCDMA deployment cost has recently been debated on this thread and others. Refer to these posts- 1. G&K Mod discussing Brian Modoff’s (DB) research- Message 19708326 Message 19709152 2. QCOM Mod- article suggesting $183B for a Western Europe WCDMA build-out (not including spectrum cost)- approximately $515/ subscriber (equates to $11.3B to cover all 22M AWE subs). Message 19755881 As regards a WCDMA overlay on top of the existing GSM/GPRS/EDGE networks, Qualcomm states – “The UMTS overlay requires new BTSs and BSCs and in most cases, new MSCs also. Further, Qualcomm has stated that because of the spectral efficiency of CDMA, even at higher frequencies than GSM/GPRS , “coverage sites required are about the same given the greater link budget of CDMA technology”. I’m not sure the same can be said of a WCDMA overlay.