Forbes/Andrew Seybold's Wireless Outlook Announces Investment Opinion in the US

date: November 20, 2001

The Nov. 8 decision of the Federal Communications Commission to lift the five-year-old 45-MHz limit on the amount of spectrum wireless carriers can own in a given geographic area introduces much-needed flexibility to wireless carriers' infrastructure strategies and should accelerate the pace of their 3G implementations, writes Editor Andrew M. Seybold in the current issue of Forbes/Andrew Seybold's Wireless Outlook.

Carriers can now own up to 55 MHz, with the cap to disappear entirely as of Jan. 1, 2003. "Most wireless operators need more spectrum so that they can implement 3G services," he writes. "Unfortunately, new spectrum is still years away ... (but) With the spectrum cap removed, wireless operators ... will be free to buy and sell spectrum in metropolitan areas around the country or to merge."

Seybold hypothesizes various strategic and technological scenarios that might be adopted by wireless carriers, concluding that "removal of the cap creates a whole range of new possibilities, combinations and deals." He also identifies companies that could present exceptional opportunities for investors with interest in the wireless sector.

In a second article, Seybold reviews highlights of a technology analyst conference held by Sprint PCS in late October, reaffirming his earlier view of the company as "one of our favorite wireless stocks."

Although there are holes in the company's coverage, its licenses cover some 85 percent of the U.S. population, Seybold notes, and its new subscriber activity leads its competition. Along with conference highlights, Seybold outlines technology, marketing and competitive issues that face the company.

"Sprint PCS also has a clear technology roadmap," he writes. "Sprint PCS' top execs claim Sprint will have its nationwide system running on cdma2000 1x (3G) by the middle of next year."

In another article, Seybold is critical of the high-speed wireless strategy announced by Cingular Wireless, which, he says, "has chosen a wireless roadmap that is expensive and convoluted." He analyzes the company's intended deployment of GSM, GPRS and EDGE, finding serious problems in both the spectrum and equipment areas.

"While Cingular Wireless is waiting for the right time to file for an IPO, it's moving from a network that is throwing off cash today to a network that will suck up all of the cash it can generate tomorrow. This is a bet that Cingular cannot win," he says.

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