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Technology Stocks : Vodafone-Airtouch (NYSE: VOD) -- Ignore unavailable to you. Want to Upgrade?

To: David Wiggins who wrote (866)	3/6/1998 9:11:00 PM
From: John Nail	Read Replies (1) \| Respond to of 3175

It's the same story for the last year and half. Viscous price wars lead to reduced profits. Again, I think they are looking at the long-distance copper-wire companies and see their price wars and extrapolate that to wireless. However, penetration is already 99.9% in that business so if I am AT&T and I want growth I take it from MCI or Sprint. All my advertising and efforts are spent on taking share from other companies. AT&T doesn't advertise to get people to sign up for a phone. But in wireless, I am looking at 10-15% penetration rates so I am still trying to get the other 85% to gg wireless. If my competitor slashes prices and increases their advertising and gets those penetration rates to 25-30%; ATI's potential market grows, yes I've got to lower prices, but I also spend less on advertising and maybe just maybe the elasticity of demand for wireless is greater than 1. So that the percentage of quantity sold rises more the percentage drop in price.