Brian and all,
More from IRIDF's 10 K:
At March 10, 1998, there were 12,008,812 shares of Iridium World
Communications Ltd. Class A Common Stock, ($0.01 par value per share)
outstanding.
As of March 10, 1998, IWCL owned approximately 8.5% of the outstanding Class 1 Membership Interests in Parent.
Iridium estimates that it will have customer counts in the year 2002 in the range of 2.2 million to 2.5 million for its satellite-based voice services, Iridium World Satellite Services (satellite voice and paging) and Iridium World Service (the combination of Iridium World Satellite Services and Iridium World Cellular Services), 1.0 million to 1.3 million for stand-alone Iridium World Cellular Services and
350,000 to 500,000 for stand-alone Iridium World Page Services.
PRICING
Iridium intends to implement a pricing strategy for its voice services similar to the prevailing pricing structure for terrestrial wireless calls. Prices for terrestrial wireless calls generally reflect two components: a charge based on the landline "dial-up" rate for a comparable call (primarily the long distance charges) and a mobility premium for the convenience of wireless service (including any roaming charges). Pricing for both Iridium World Satellite
Services and Iridium World Cellular Services is expected to be based on this structure.
For international Iridium World Satellite Services calls, which Iridium expects will constitute the majority of calls over the Iridium World Satellite System, the "dial-up" rate component will be designed to approximate the rates for comparable landline point-to-point international long distance calls. Iridium has analyzed and will continue to analyze published international direct dial rates around the world as well as published international calling card rates of many of the largest international telecommunications carriers in establishing the "dial-up" rate component. Iridium intends to set the global mobility premium with reference to the premium charged by other wireless services, including cross-protocol international terrestrial wireless roaming services and competing MSS systems.
Iridium will set the wholesale prices for its services to allow for a suggested retail price that will approximate the "dial-up" plus mobility premium. Iridium's wholesale price will be designed to compensate Iridium, as the network provider, and the originating and terminating gateways, as well as to cover the switched telephone network ("PSTN") tail charges. The home gateway will mark up
the wholesale price and the service provider will establish the final retail price. Iridium expects that for international wireless calls, Iridium's suggested retail prices will be competitive with other global MSS systems. In addition, from a regulatory approval perspective in markets where the monopoly telecommunications provider and the licensing authority are the same entity, a pricing strategy that takes into account the "dial-up" alternatives allows Iridium to respond to concerns that Iridium will capture the local monopoly
provider's long-distance revenues by undercutting terrestrial "dial-up" rates.
For Iridium World Cellular Services pricing, the "dial up" rate component is primarily the long distance charge, if any, which will be passed through to the customer. The mobility premium will be set to compensate the parties involved, primarily the serving network for its airtime charges, the visited gateway for customer authentication and Iridium for protocol translation services. The retail price will include the markup of the home gateway and service provider. Iridium believes that its Iridium World Cellular Services suggested retail prices will be comparable to other cross-protocol roaming services.
In addition to airtime charges, Iridium subscribers will pay a monthly subscription fee in the same manner that terrestrial wireless customers pay monthly charges. Iridium will permit service providers that are wireless network operators to offer Iridium World Satellite Services as additional features to their existing wireless services, permitting their customers to remain customers of the wireless network and to roam onto the IRIDIUM System. These customers will pay an additional roaming premium for calls made over the IRIDIUM System.
Initially, Iridium World Page Services subscribers will pay a fixed monthly subscription fee for unlimited paging. Iridium expects to implement per page pricing after commencement of commercial operations, with the cost per page based, in part, on the size of the geographic area covered by the page.
While Iridium expects to compete with other MSS systems and other
cross-protocol roaming services, Iridium does not intend to compete with terrestrial cellular telephone systems for the vast majority of personal communications services, because, among other reasons, Iridium are expected to be priced significantly higher than most terrestrial wireless services.
Iridium has assigned all of its gateway service territories to Parent'sequity investors or their affiliates. Iridium expects these gateway service territories to be served initially by up to 12 gateways.
Brian H. |
