Guru 00-I'm prepared to stipulate that the operating costs of Irid and G* will be similar, assuming IRID converts bonds into equity and Mot agrees to dramatic cuts in its O&M contract. I'd also stipulate that the G* phones are essentially the same in mass/size as Irids. There's some anecdotal evidence that the G* voice quality is better and the phones more convenient to operate, but let's discount that as coming from anonymous, biased, sources.
Allowing the above, G* still has at least three decisive advantages:
1. According to SEC filings the G* system has 50% more life and 7X more capacity than Iridium.
2. G* has real service providers, well incentivized to move the product. If we take accept 1.50 per minute as the projected retail
price, 1.00/minute goes to the gateway operator and retailer, of which 0.75$ is probably pure profit, once the system is loaded. (Gateways cost about 20M$ to build, maybe 5M$/year to operate.)
3. G* and Loral/Qualcomm interests are almost perfectly aligned, as contrasted with Irid/Mot, plus G* has Bernard Schwartz (OK, that's a fourth reason)
BTW, G* also supports paging. Although it's true that paging units haven't been announced as yet in any concrete way, I don't expect that to be "competitive advantage" for Iridium for any length of time. |
