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To: Clarksterh who wrote (1304)	1/3/1999 5:31:00 AM
From: Joe NYC	Respond to of 34857

Clark, I must have overlooked this post. Great info. I have a couple of questions about your model: The reason I say this is that when I do similar costing studies using publicly available numbers - $150K for BS equipment, 30 users per BS for a 1.25MHz channel (CDMA-2000 specs degraded for 14.4 voice - optimistic for current CDMAOne), a 5 year life for the equipment, 25% usage over 19 hrs per day (from article) - I get 3M billable minutes per year, and capital expenses of $40k per year which equates to $0.013 per minute. Don't they typically have more than on one 1.25 MHz channel? Is 150K expense per channel? I guess you can fit 3 1.25 MHz channels in 5MHz block. Would the cost be tripple, or $450K? I was always wondering how wide are the 800 MHz bands and PCS A, B, C, D, E and F blocks. Also, why is wireless industry so concerned about the peak use? All, right, some calls will be lost until they add another cell. What's the bid deal? America Online didn't care, and look where they are now? All the ISPs sell more than they are capable of offering, and they they seem to prosper. They offer low prices, get millions of users, and since demand exceeds the supply, they just use the queue, like in Soviet Union, to ration distribution. And millions of people live with it. They waste minutes or hours of their time rather than pay extra $5. The same with the airlines. People will rather suffer in the seats built for midgets, some will get blood clots rather than demand and pay for human size seats. Why doesn't the wireless industry see the pattern? Why don't they lowball the prices, get everyone to replace their wireline phone with wireless, and worry about peak usage later. (which BTW would be great for Qualcomm, if suddenly every operator was capacity constrained) Note that even my conservative estimates for capital costs are vastly less than the capital costs at Sprint which are $30 per month per user. If you assume 300 minutes per user per month this is $0.10 per minute. If you further assume average usage north of 10% they have capital costs that are about 4 times what I would expect from my very simplisitic analysis I guess the >10% usage is a pretty big assumption on your side. If 25% usage is approaching the usage limit at peak times, Sprint could only increase their subscribers by less than 150% from the current count (which seems too low for me). But Sprint just opened for business recently (literally in some markets). I wouldn't be surprised if they were below 5% usage. If they were at 5% usage and 25% was the limit, reaching the 25% limit would reduce the capital cost to $6 per user per month. It would be nice to have some real-world numbers about usage patern, and utilization from some representative markets to have some idea what kind of challenges the operators are facing. But I guess those numbers are trade secrets. Joe