Subject: [NEXTEL-1] Future of Telcos

From: [email-masked]
Date: Wed, 09 Jul 2003 12:10:34 -0400

------- Original Message --------
   From: Robert Schwaninger <[email-masked]>
Subject: Future of Telcos

The issue is one of capitalization and return on long-term investment versus a
regulatory environment that spurs innovation from all market segments.The ROI on
copper is known and huge and the sunk investment in same will be allowed to
continue for the foreseeable future due to the volume of cash flow received from
every market segment.As additional capitalization is required by demand, the
demands on expected ROI will increase in proportion to the availability of capital
and the expectations of the capital markets, as applied against margins of return
to satisfy debt and compared to alternative investment placement.

If, for example, the concept of a wireless local loop that still haunts the long
term strategy of certain entities, comes to fruition during the subject period,
then telcos will be determining the efficacy of capital expenditures in continued
wired technologies.The debate that will be taken up will be between the engineers
who are asked to insure sufficient and reliable system capacity from a proposed
wireless infrastructure versus those more conservative voices that will tout the
nearly limited capacity of fiber, albeit at substantially higher capital
expenditure rates.Under either scenario, the market will be moving away from
"local telephone service" and into integrated technologies to deliver all
information/entertainment/communications via a small number of competing entities
that can provide the necessary capital to cause the revolution in the basic
delivery system.

The above said, in ain'tgonna happen in the next ten years.Simply put, the capital
markets cannot digest that much investment that fast.

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