From: "Benedict Evans" <inherent@hotmail.com>
> ** Network spend -
> I've seen numbers of between three and five billion euros for the UK,
France
> or Germany, which is for stand-alone networks as opposed to shared
systems.
> That would work out at between Eu30 and Eu80 per pop, or Eu50-115 per sub.
> Even if you multiply that by four operators, you're still nowhere near
$750
> (Eu862).
Are your numbers just for network infrastructure, or total cost of
customer acquisition (which, in Japan, can include substantial
subsidies for the handsets themselves)?
> I haven't looked at DoCoMO's 3G capex estimates. $750 per current Japanese
> mobile subscriber would work out at $46.5 Billion.
> There's no way on earth that's the right number.
Why? Because it's so high? NTT paid $9 billion for a mere 16%
share of AT&T Wireless, to get i-mode going in the U.S. Tens of
billions here, tens of billions there, pretty soon you're talking
about a lot of money.
> Working it the other way, $5 bn infrastructure
> spend (i.e. top end of what the Europeans are saying) and $750 per sub
would
> equal 6.66m subs. Anyone believe that's where Foma will top out in Japan?
> There are more people than that in Tokyo!
But how many of them really need FOMA speeds just now? And how
many of those customers will bite unless somebody underwrites their
handset costs? This thing is just getting started. Haltingly.
> **Market share
>
> If you've already got 30 million 2G subs, it's relatively easy to move
them
> to 3G.If you have none, and the market is at 80% penetration (as it will
be
> by the end of 2002), then you have to get all your customers out of churn
of
> existing operators networks. Which is harder.
The point being....what? That customer acquisition might get expensive?
See below.
> ** Business case
> In the UK, licence fees per sub per month are equal to 13.5% of fixed
> revenues per sub per line.
You're missing a time unit, which I believe is "per decade." Think of what
happens in technology in a decade.
> Either you believe that everyone will use their
> mobile, or you don't. If you do, then 50% of fixed revenues go to mobile
and
> huge piles of cash come spining out of the business even without services.
> If not, not.
Huge piles of cash! Ooh! Let's go swimming in it!
Aren't you making the elementary error of confusing massive revenues
with actually making money?
Being a viable business involves getting and keeping customers, while
making enough of a profit in some years to cover your losses in
other years. Getting a customer - as you point out above, indirectly -
isn't so easy, especially with high penetration. Keeping that customer,
come what may, may prove to be even more difficult soon enough.
> What if fixed operators cut their rates to near-zero? So what? Even if
they
> could - i.e. run at a loss to preserve market share - mobile still beats
> wired.
Numbers, numbers. The U.S., by official casualty reports, had killed the
entire population of Vietnam two or three times over by the time it was
finally run out of Saigon by huge crowds of armed....who? Laotians??
So excuse me while I burn my telecom-industry draft card. (Actually,
I already did - check TCSI's stock price.)
-m
leap@gol.com
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Received on Sat May 19 06:01:07 2001