Globalstar Telecommunications Limited GSAT Message Board

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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 61.03

+0.3%

Nov 26 3:59 PM EST

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To: TMann who wrote (5542)	7/6/1999 12:30:00 AM
From: Maurice Winn	Read Replies (1) of 29987

TMann, Yes, Service Providers set the retail prices. Globalstar can cut the wholesale rate to them and the Service Providers might or might not pass the cut on. If they don't they'd get less market share and when prices went up again, they'd be the losers. So they would need to be careful about not passing on savings. The original agreement was to the effect that Globalstar and Service Providers might agree to mutual price reductions. AirTouch's idea of a single N. America wide rate including long distance makes very good sense. That's the sort of thinking that's needed to make it popular. But they need to ensure that rate is attractive enough to make the handset production lines red hot due to wild subscriber demand. So far there isn't too much sign of that [$2 per minute won't do it]. Yes, there are also the minimum payments to maintain exclusivity, which is good, but a minimal approach to the business rather than how to maximize things. That just stops things being too bad. It would be a shame if that part of the agreements became relevant. Yes, people have passed along the suggestions. Globalstar is aware of them but is imbued with the idea that demand will be so high that no special prices will be needed to get things going quickly enough to rate the company a wild success. I'm sure AirTouch would pass on special discounts because they have a great incentive to make their terrestrial service attractive. They can do that by getting a lot of people onto Globalstar and those people will use nearly all terrestrial minutes. They get a double whammy sales advantage. Any cigarette maker knows 'first you get them hooked' then they'll pay the price. So give away the minutes for a while. We've got heaps! Maurice TWO FREE-TRADE LEGS OF LAMB WITH EACH GLOBALSTAR PHONE

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