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Cell Phone Investment Ideas

Disclosure: cellphonecarriers.com is not a broker. We are offering our opinion on cellular industry trends and companies. If we own shares of a company, it will be disclosed. We receive no payment or commissions of any kind from any possible investment company we list.

Industry change: Profit off cell phone number portability

Powerwave Technologies
Nasdaq Ticker: PWAV
We own stock in this company
Updated: September 5, 2003

Since the cellular phone industry is constantly changing, possible good money making investments are created and taken advantage of by shrewd investors. On Novemember 24th, 2003, a new industry standard will be introduced regarding Cell Phone Number Portability. Today, if you had a cell phone and wanted to switch carriers, say from AT&T to Sprint, you could, but you could not take your cell phone number with you. By switching carriers, you would get a totally new number. Starting on November 24th, this will no longer be the case.

Think about this: Imagine if you have a large business (ABC Company), and ABC Company signed up with AT&T three years ago for 500 cell phones. During the first year, many users at ABC Company complained of poor reception or poor quality. The account managers at ABC Company would like to explore different cellular carriers, but this would involve getting 500 new cell phone numbers, changing business cards, contact information - a huge project. Now with cell phone portability, ABC Company can switch carriers and not skip a beat.

How we are trying to profit off this change

They way we figure it, there are winners and losers when it comes to cell phone number portability. We feel the losers are the cell phone companies. Many accounts will be switched, customer loyalty won't exist, competition will increase and changes in quality are a must. The big winners are the consumer, as now cellular carriers must fight to keep every customer from switching, the deals are going to be tremendous. Best of all, these carriers are going to have to improve their QUALITY.

The biggest quality complaints regarding cell phones is reception. "The call gets dropped..", "I have to go to the top of my driveway just to make a call...". Consumers are demanding better quality and reception, and the carrier who provides the best reception will win the lions share of future cellular users. Since we can't predict who that company may be, we have decided to invest on what we know for sure; the cellular carriers will spend huge dollars to improve cellular reception. This is why we decided to invest in a little known company called Powerwave Technologies.

Powerwave designs and manufactures power amplifiers to improve cellular reception areas. These power amplifiers are for the leading TDMA, CDMA, GSM and other cellular technologies that exist today and that will be expanding upon in the future. Basically, Powerwave can service most, if not all cellular technology platforms.

We expect Powerwave to receive several large contracts over the next year based on these latest industry trends. AT&T itself is already Powerwaves top customer, accounting for over 10% their sales.

With the stock market, it's impossible to predict future stock prices and events. Based on these facts, our stock purchase of Powerwave will be at least an 18 month hold.

Investment in Powerwave is not without it's risks. There are several competitors in the wireless amplifier space, and the stock of Powerwave is very volatile. In our option, any stock market risk will be offset by the improved business from cell phone number portability.