"Tapping Into Wireless" is written for those who want to invest in the high-growth area of wireless telecommunications. Entrepreneurs entering the wireless industry and people interested in learning more about the world of wireless will also benefit by reading this book. The book begins with a chapter about the history of wireless technology. Taulli and Mock say we can understand the how's and why's of the industry by learning a bit about the history of wireless. This will help us make better investment decisions today. After telling us about the advent of the telegraph and the early adventures to lay transatlantic cable to allow continent-to-continent communication, Taulli and Mock discuss Gugielmo Marconi's development of the radio and the growth of amateur radio. Surprisingly, nearly 100 years ago, many people imagined that wireless would become the dominant personal communication device. Because of the ability of waves travelling through air to reach any location and the expense of laying cable from every point to every point, it seemed logical that person-to-person communication would be radio-based, not cable-based. Yet, only recently have wireless personal communications become a consumer reality. Taulli and Mock explain that the wireless future had to wait until electronic advances allowed compact and reliable wireless devices. That didn't stop early promoters of wireless from starting companies promising a bright future and guaranteeing huge investment returns. Taulli and Mock discuss the wireless telegraph investment bubble of the early 1900's. Taulli and Mock write: "Unscrupulous stock promoters exaggerated this theoretical advantage of radio way beyond reason at the time....it demonstrates what can happen when a revolutionary technology emerges in a capitalist society. Truly, there was a very real and promising industry in wireless telegraphy and telephony; it only needed more time to develop. The problems with stock scams at this time actually had more to do with corrupt financiers than with the radio industry...." Taulli and Mock explain a successful investor in technology must distinguish hype from reality. This doesn't imply the need to have an engineer's level of understanding of wireless technology. Taulli and Mock write: "...knowledge of wireless technology may not be a significant advantage for the investor. The technology buffs who have the inside scoop on how all this stuff works often make no better investment choices than those who are clueless in this area." The authors explain that too many other factors affect wireless investments, including government regulation, politics, communication standards adoptions, buy-in from industry leaders, intellectual property management, and consumer taste. For example, Taulli and Mock tell us that, as radio grew in America, the U.S. government felt a foreign corporation shouldn't control the airwaves, so the U.S. government put pressure on Marconi to sell its U.S. radio interests to an American-based company. Overnight, G.E. and RCA became the dominant radio companies in America. By this example, the authors alert wireless investors to the politics and regulations affecting their investments. We also learn about the formation of the Federal Communications Commission to manage the frequencies available to radio. Because unregulated use of the airwaves led to overlapping signals as multiple users tried to communicate on the same frequency, the government decided it should regulate the spectrum of available frequencies. The FCC decided it would own the air frequencies and auction off the rights to broadcast on various parts of the electromagnetic spectrum in various geographical regions. Taulli and Mock tell us that, in 2001, the FCC earned nearly $17 billion from spectrum auctions. Further, the authors say the U.S. government will earn even more through such auctions in the future. (I've heard of entrepreneurs and investors buying auctioned airwave rights and reselling them for a huge profit. Some people have literally become very rich by legally buying and reselling thin air!) In a chapter about investing in wireless network operators (i.e., the companies that provide access to wireless communication), Taulli and Mock tell us that spectrum licenses are an important investment metric (POPs). Taulli and Mock write: "Licensed POP's include the population covered by spectrum licenses. If a service provider has a license to 10 MHz of spectrum in Atlanta, Georgia, then the population of this area is included in its figure for licensed POPs... . The owning of rights to spectrum is basically wireless real estate... ." Taulli and Mock cover many other important investment measurements when evaluating wireless network providers, such as revenue per user, customer turnover, and the average cost to add a new customer. Wireless network providers aren't the only way to profit by investing in wireless. Other chapters of "Tapping Into Wireless" discuss wireless IPO's, investing in wireless equipment and component manufacturers, mutual funds that invest in telecommunications, ways to invest in foreign wireless companies, and knowing when to sell a telecommunications stock. Angel investors will find the chapter about investing in smaller, private, wireless companies valuable. Entrepreneurs will especially enjoy the chapter about wireless enterprise solutions. Basically, "enterprise solutions" involve helping companies use technology to become more efficient or to do things in new ways. Such enterprise-solution companies usually don't provide wireless network access nor manufacture components. Rather, they usually develop database systems and computer code allowing a company to use wireless devices in a productive way. Taulli and Mock point out that wireless access to the Internet will create huge opportunities for entrepreneurs and those who provide wireless enterprise solutions. Taulli and Mock write: "The combination of wireless capabilities with the resources available on the Internet has every entrepreneur chomping at the bit to develop something hundreds of millions of cellular phone owners would pay to have....The merging of the Internet and wireless communications has tremendous potential to change the lives and cultures of people around the globe... Not only do we have a global network that stores vast amounts of information at various nodes, we also have the capability to access one of those nodes from virtually anywhere on the planet." |
