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To: Sawtooth who wrote (22193)	1/29/1999 11:15:00 AM
From: DaveMG	Read Replies (1) \| Respond to of 152472

Has the been posted? The view from Finland Mobile operators - merger mania '99? By Tero Kuittinen, Guest Columnist Last Update: 10:00 AM MT Jan 18, 1998 HELSINKI, Finland - The deal between Vodaphone (NYSE: VOD) and Airtouch (NYSE: ATI) looks likely to trigger a feverish round of further consolidations. Now that the first genuinely global mobile operator has been born, the small players are starting to look increasingly vulnerable. There are two major driving forces setting the stage for a flurry of new deals. First, many of the big European operators have been enjoying phenomenal increases in their stock prices. This enables firms like Mannesman and TIM (the most succesful Italian operator) to finance possible deals mainly through stock swaps. Second, the introduction of AT&T's One Rate Plan in USA was the defining moment of 1998 for the nascent American digital mobile market. For the first time customers were offered country-wide roaming with no additional charges. The launch of the AT&T plan coincided with the launch of Nokia's 61xx mobile phone platform, which went on to become the number one mobile phone model in USA last year. This model was the first modern tri-mode TDMA phone, enabling customers to use either of the two digital frequencies employed by TDMA in USA - or the older analog network with its superior coverage. There previous tri-mode phones on the market had been rather heavy and underpowered. AT&T shrewdly launched a massive ad campaign simultaneously trumpeting the benefits of the no-charge roaming and the new generation phone technology. American GSM operators on the block The result: AT&T actually had to scale down the ad campaign, because they couldn't keep enough new tri-mode phones on the shelves. The success of the aggressive One Rate Plan launch surpassed even AT&T's expectations. And this was bad news for smaller operators. Major American operators like Sprint (NYSE: FON) and Nextel (NASDAQ: NXTL) can offer a similar plan and have been busy copying AT&T's strategy to hold their own. But most of the operators are regional and they are facing an insurmountable task in trying to keep up with the larger operators. As a result the pressure to find partners is now intense. The first to go: the embattled US GSM operators. Companies like Omnipoint (NASDAQ: OMPT) (mainly on the East coast and the Great Lakes area) and Western Wireless (NASDAQ: WWCA) (Western USA) are regional players whose stock performance is badly lagging the runaway success of their European counterparts. They are the most tempting take-over candidates at the moment. BellSouth (NYSE: BLS) is arguably the most succesful of the Baby Bells and they might be too rich to be taken over - instead, they could swallow some second-tier European operator or create some sort of a partnership. GSM operators in America are suffering from the intense competition from AT&T's TDMA network and the rapidly growing CDMA networks, which have a coverage advantage. Operators & manufacturers The interaction between rapidly developing handset technology and the mating rituals between operators is a fascinating topic. The launch of first tri-mode phones that were both cheap and powerful underpinned the success of AT&T in 1998. Consumers may not be ready to pay a sizable premium for phones that pack several standards into one model. But they apparently are whipped into a frenzy by phones that cost and weigh as little as single-frequenzy phones, but deliver superior coverage, thanks to the multi-mode technology. Most obvious synergy benefit would be delivered by a European GSM operator - US GSM operator combo. There are already models that combine the US GSM-1900 and the world wide GSM-900 into one package. A key point: the Bosch worldphone costs as little as 300 bucks, so even people who visit Asia or Europe once a year might be tempted, since they don't have to pay a lot for the privilege of global reach. Rigth now, US and European operators have not seen much reason to advertise this concept and Bosch has lacked the brand awareness and ad budget to make much headway. But that will change in a hurry when Ericsson and Nokia start pushing their own chimera phones. And as soon as the American and European GSM operators start hooking up, they will have a powerful incentive to sell this concept - the global coverage will be an important advantage GSM operators in USA have over the competing digital standards. More about the worldphone market from the manufacturing POV in the future. We are entering the situation where the operators and manufacturers are entangled in a complex, rapidly evolving game. The operators need the manufacturers to come up with multi-mode phones that are cheap and sleek to realize the synergy benfits from running networks in different countries and based on different standards - the manufacturers need to anticipate the coming mergers and place their bets accordingly. Ericsson has already announced a highly ambitious model that marries various TDMA and GSM standards, enabling excellent coverage for USA, Latin America, Africa, Near East, Asia, Australia and Europe. Bosch has shrewdly leapfrogged several major manufacturers to become the first to introduce a GSM-900/GSM-1900 phone. There are already several commentators who forecast that Vodaphone will soon launch a phone that combines the CDMA used by Airtouch in USA and GSM-900 used by both companies in Europe (Vodaphone is big in the north, Airtouch is strong in the "Club Med" countries). Either these commentators are totally clueless or they are sitting on the telecom scoop of the century. I favor the former. There is a great deal of bad blood between GSM/TDMA phone manufacturers and the CDMA camp. As a result, the leading phone makers seem to be concentrating their resources to creating various models combining TDMA and GSM formats. All current evidence, both from published comments from the companies and sources within the industry seems to back this. The phone manufacturers giving priority to CDMA have little or none expertise or presence in the TDMA and GSM markets and are unlikely to come up with models that are genuinely competitive in price, weight and power. That's crucial: the new multi-mode phones have to be close enough to current models in their technical specifications to lure consumers who may only need to go aboard once or twice a year. Prospects It looks like the most synergy benefits can be realized by hooking up GSM operators from different continents, GSM operators within USA or GSM operators with TDMA operators. The only multi-mode phones launched in 1999 will probably mix and match GSM-800, GSM-900, GSM-1900 and the two TDMA frequencies. This technological and corporate strategy decision made by leading phone manufacturers will influence the merger decisions made by operators. My favorite take-over candidates are Omnipoint and Western Wireless - nice and cheap. It usually makes little sense to buy stock in the company purely based on take-over anticipation. But in this case, a merger or strategic alliance will have a genuine impact on the future of these companies. Their stock prices are currently lagging the category leaders, because the sudden importance of country- or even world-wide coverage is making them look provincial. They simply have no choice but to merge or create stronger strategic links than the current North American GSM Alliance. I've heard enough buzz recently on both to suspect that neither will be independent come next Xmas. The technological development in the handset sector seems to award them a sudden access to potentially far wider coverage in the coming months. They will both probably show better than anticipated subscriber growth when the 4Q numbers are released, which may improve their negotiating power <TK> debry.com

To: Sawtooth who wrote (22193)	1/29/1999 11:16:00 AM
From: biostruggle	Respond to of 152472

Hit my sell signal 65 for second time in a week. I'm fighting my trading instincts to hold position. By the way what happened to big announcement from DoCommo.