Dear RS: Thanks for the note! Let me attempt to address your counterpoint issues:
AMSC and INMARSAT h/w is "luggable" but not really mobile and h/w costs are at least 2X what G*'s suggested retail price for a handset; as a GEO based provider they have latency effects that can't be eliminated.
I've seen Mini-M quoted at $1.7K USD according to the WSJ 04/27/1999 article "Glitches Surface as Iridium Phones Go to War in Kosovo" and I've seen offers on the net for $1.8K USD from Satellite Warehouse (http://www.satphone.net) and COMSAT (http://www.comsat.com) with bundles of 300 minutes included in the $1.8K purchase price -- however neither of these sites has the prices posted at the moment. With respect to the size/weight/hassle factor issues, the early "Car Phone" mobiles, such as the one i purchased in 1978 suffered from the same weighty, bulky and costly issues. After getting my "Car Phone", i wanted a "portable" for trips and went out and bought a briefcase mobile phone (a Livermore LAP) for another $2.5K that i still have to this day as a museum piece. It allowed me to fly to another city and with an external mag mount unity gain antenna receive and place calls from rental cars with the aid of a cigarette lighter adapter. You could also use it stand-lone with the antenna build into its lid and its internal batteries that would keep it going for nearly a day. Of course when cellular came around, I was the first in line and spent 4K on the Motorola DynaTAC 8000X handheld unit to replace my "luggable" briefcase phone. Cost was not the issue of the h/w or of the service, it was need driven by demand. And talk about quality! Oh boy a scratchy, staticy party line that anyone could listen in on, let alone barge in on (and did). I don't believe for a minute that the lack-of demand for MSS is predicated on such things as "luggable", expensive h/w costs or GEO based latency effects. We had all these issues and more with pre-cellular mobile telephony and it sure couldn't be supplied in enough quantity even given the marginal quality. Given the limitations of pre-cellular systems, even with these expensive and burdensome take-it-or-leave-it constraints, demand far outstripped supply. The cellular operators were standing by ready for the killing when they turned up their networks. Many phones were pre-sold, pre-installed, ready and waiting for the day the networks went live. There is even a great story about the Chicago AT&T market trial system that had several hundred customers on it -- with thousands more on a waiting list. In the trail days the cellular antenna (it was diversity, so there were two elevated feeds on each car trunk lid of the test customer) were a Very Well Known sight around Chicago. One day, some gangster who was also a trial customer got "hit" -- his car riddled with bullet holes and he was killed in the ambush. That night on the evening news they showed a picture of his bullet ridden car -- which also showed the trunk with the two well known cellular antenna's on it. The next day Ameritech (the cellular trial host carrier) was SWAMPED with calls: Given that Mr. Gangster was dead, was his number/slot on the trial system available?? Sure haven't seen this kind of take up in any of the extant MSS offerings...
Inmarsat's price of 3$ (I've never seen anything less than that, btw) is substantially higher than G* for the types of (regional) calls that G* expects to be by far the most common. If the 1.50 price you mention is really available from INMARSAT, fully terminated, then I suppose for international calls it may be cheaper than G*, but how often do people make international calls on their cellular phones?
At Telecom 99 i was informed by a representative in the Inmarsat booth that if you shopped around you could find Mini-M for $1.50/min for fully terminated calls. Here on the net I have found it as low as $1.60 at Glocall (http://www.glocall.com). However, I don't believe, as indicated in my previous missive that the $1.50/min price (or even a $1.60 per min) has anything to do, or will have anything to do, with the lack of take up.
How much does Inmarsat charge it's distributors (i.e., how much profit incentive/pricing flexibility do they have). In G*'s case we know that the difference in G*'s price to the GWs and the suggested retail price to consumers is about 1$ (to be split between GW and retailer). Out of that 1$, 0.7-0.8 is almost certainly pure profit. Message: the retailers and GW operators will have plenty of incentive to push the service, and room to reduce rates if necessary to attract customers.
I don't have a clue into the inner business workings and relationships between Inmarsat and its distributors. But what I can tell you from the pre-cellular mobile telephone days is the mobile phone system operators (generally the RBOC's as we know them today) didn't pay a penny of commission to the dealers who put customers on their systems. All the distributors profit was made from equipment and accessory sales, installation charges and FCC license administrative license fee's. Yet, demand totally outstripped supply...
Best regards,
Geoff |
