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To: Gaffer who wrote (13463)	8/7/1998 5:56:00 PM
From: Sawtooth	Respond to of 152472

Nice link, Dennis. Thanks. (EOM)

To: Gaffer who wrote (13463)	8/7/1998 9:26:00 PM
From: Maurice Winn	Respond to of 152472

Dennis, thanks for the link strategyanalytics.com They gave a very gradual increase in subscriber numbers to 2003. Saying: -------------------------------------------------------------- "However, a lot of work still needs to be done as can be seen from the fact that the average CPM for entry plans is still 54 cents. The comparable rate at 100 minutes is 46 cents, dropping to 37 cents at 300 minutes (half the average residential landline minutes). The wireless industry needs to build Dependency. Evidence of the failure to build dependency can be seen in:  36% of subscribers talk for less than 10 minutes per week  30% receive no incoming calls  1/3 make/receive less than 3 calls per week. -------------------------------------------------------------- There seems to be little recognition of price elasticity. John Cuthberston has just bought in. Price was important. Same for me. Same for most people. Though Iridium customers can't even spell it. cdmaOne can produce minutes in the 5 cent per minute realm easily enough. With prices at 10 cents per minute, people will start using their handsets constantly. The network law = the value of a network is exponentially proportional to the number of people on it means that as the price drops and subscribers increase, the value of the network takes off. Two people on a network have one person they can talk to. 3 people on a network each have 2 people they can talk to. 4 people on a network have 3 people they can talk to. 5 people have 4 choices each. So for the same per person cost, the value of the network has gone up by a factor of four. When there are 50 million people on it, each person gets huge value and all they have to pay for is a handset and their little bit of the basestation nearby. There is also social pressure. At a certain stage, you really have to be on the network because people won't contact you by hunting around the wired system. There is still quite a way to go before cdmaOne becomes a 'must have'. But the trend is clear. Combine this with the fractal nature of cdma networks, lumpiness such as spectrum allocations aside, and subscribers should grow extremely quickly as p-----s drop and network values increase hugely. Mergers and takeovers will take care of spectrum lumpiness. The State permitting. We can see from the above figures, that 1:3 people or maybe even 1:2 are happy to pay the handset price, just to have the phone available if they want it. But they won't pay for the high per minute prices to use them casually. With the new p------g plans, as John says, this picture is going to change very quickly. There will be an avalanche from analog to cdmaOne - in fact, it must have already started in the USA. 1998 will be good. 1999 will be a rampage. Mqurice PS: On re-reading, I guess people will say, "but using a handset, you are immediately on the world wide network, so the network value is irrelevant since it is already huge". True enough, but the carrier costs and negotiations remote from your own network seem to add a disproportionate amount. It costs a heap to phone international although the actual cost is near zero. With more competition and smarter cheap price hunting, I suppose those costs will come down. In New Zealand, you get free calling within your own cellular network anywhere in New Zealand off-peak, but pay real money to call a landline or other network, although the actual costs are no greater.