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To: John Hatten who wrote (11275)	6/8/1998 3:27:00 PM
From: bananawind	Read Replies (1) \| Respond to of 152472

All... Australia. Based on the following, it looks to me like Hutchison will build a cdmaOne system in Sydney and Melbourne. When linked to OzPhone's system covering much of the remaining populated areas, it looks like there will be a national cdmaOne footprint. Can anyone confirm Hutchison's intentions? -JLF June 8, 1998 Australia nets $216M for PCS permits SYDNEY, Australia-The Australian Communications Authority completed its personal communications services spectrum auction May 25, netting the government about $216.3 million for 211 of the 230 lots offered in the 800 MHz and 1800 MHz bands. Auction winners included four new licensees: Hutchison Telephone Pty Ltd., AAPT Wireless Pty Ltd., Catapult Communications and Qualcomm Inc.-owned OzPhone. Existing mobile carrier Telstra was awarded the most licenses, and other Australian wireless players, Optus and Vodafone Group plc, also were significant winners, said ACA. Telstra, which paid almost $109 million for its licenses, likely will build on its Global System for Mobile communications network and introduce a number of new value-added services. Hutchison, the largest paging company in Australia, was the second-highest bidder at about $35.2 million. The company apparently plans to diversify its service offering with its new PCS licenses in Melbourne and Sydney. Optus and Vodafone also obtained licenses to complement their existing nationwide GSM networks for $31.6 million and $26.2 million, respectively. OzPhone obtained licenses in Brisbane, Perth, Cairns, Mackay, Maryborough, Grafton, Tasmania and western Australia for about $6.2 million. Qualcomm is the sole owner of OzPhone stock. Catapult, a U.S. manufacturing company, won licenses in Cairns and southern Australia for less than $125,500. International companies, especially those from the United States, initially had shown little interest in the Australian auction. It seems potential buyers were concerned about entering a mature market, boasting the world's second-highest per-capita use of mobile phones. Inter-carrier roaming also was a point of contention, and it was viewed that the auction process favored incumbents. The Australian PCS licenses are for 15-year terms. ACA already has received expressed interest in the unsold lots, and plans to conduct another price-based allocation soon, the regulatory agency said.

To: John Hatten who wrote (11275)	6/8/1998 4:21:00 PM
From: Gregg Powers	Read Replies (1) \| Respond to of 152472

John: There are two issues here. At least to my mind, W-CDMA remains an opportunity rather than a threat. For the most part, the markets looking to W-CDMA are currently closed to QC. Moreover, since Ericsson would want to avoid having its new standard tied up in court for the foreseeable future, the "disaster" scenario for Qualcomm would most likely involve cross-licensing with Ericsson. Even if QC got ZERO royalties from this exchange, the market for CDMA related equipment would expand from its current subsegment to virtually 100% of the world market by 2003+ (this, BTW, would probably be a REAL disaster for carriers deploying IS-136 (i.e. US-TDMA) since they wouldn't have a migration path BUT they would have an inferior air-interface). IS-95 would not, as some have suggested, simply "die on the vine". North America has already committed to the standard, and there are networks being built in over thirty-eight countries. Carriers would not throw away their investment in order to get unproven equipment based on some new standard. Moreover, Ericsson's W-CDMA is not a technically superior solution AND it remains several years away from deployment. So, the "disaster" scenario would position Qualcomm to continue with IS-95 deployment, particularly with those carriers looking to get an edge on the W-CDMA deployment, and to participate in W-CDMA wherever it was deployed (as opposed to the current situation where QC is functionally shut out of Europe). This does not strike me as all bad. As a matter of fact, the above argument probably represents Ericsson's view of the world. ERICY realizes that its movement towards CDMA strengthens QC enormously and it needs to protect its flank by pushing its proprietary flavor else QC will take too much marketshare in the interim. ERICY probably believes that Qualcomm should be ecstatic about recent developments and not be pushing its advantage so hard. ETSI has already admitted that QC's IPR is found in ERICY's W-CDMA proposal. Moreover, a standards body cannot obviate the legal rights of a patent holder. Plus ERICY's substantial U.S. operations would be subject to injunction and damages were the company to deliberately infringe. That's the law. I cannot address the issue or invest based on what Wall Street might erroneously conclude based on a fallacious press release. Best Regards, Gregg