Globalstar Telecommunications Limited GSAT Message Board

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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 67.82

-0.9%

Dec 8 3:59 PM EST

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To: djane who wrote (6664)	8/20/1999 12:13:00 PM
From: Rocket Scientist	Read Replies (4) of 29987

This NYT article enables a calculation I've wanted to do for a long time, but didn't have the info. It says a cell installation costs 100K$ and covers 10 mile diameter area. G* GWs cover a 3000 mile diameter with a cost of, say, 30M$ for the GW plus a 3% share of the G* spacesegment cost, or 120M$; total cost about 150M$. The ratio of area served to cap ex $ is about 60X better for G* compared to terrestrial ((3000^2)/150M=60X(10)^2/100K). Arguments could be made that reduce this ratio: cell install costs should come down with volume, G* GWs overlap inefficiently and cover uninhabited spaces, etc, so maybe the advantage is 20-30X, not 60. Still very substantial. The bearish arguments on G* are generally made by people well served by cheap cellular in high pop density areas. In order of increasing sophistication, these arguments go (1) nobody lives anywhere else, (2) well, some people live/travel there, but they couldn't afford G; or, (3) terrestrial cellular will beat G on price if (1) and (2) turn out to be incorrect. I think the calculation above helps debunk argument (3).

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