LOR/G* conference call summary (thanks to the G* yahoo thread)
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Loral/G* conf. call
by: michaelth1
15456 of 15459
Just listened to the loral / G* conf. call. It was very informative, although I'm not sure I loved what I heard
(or how much BS will stick to his statements):
Handsets: 10,000 handsets available now; 35,000 by YE 99; with production ramping up to 40,000 per
month in Jan.; it seems that it will be tough, but not impossible, to get the manufacturers to ramp up more
than 40,000 per month. BS thinks that handsets are the major constraint to G*'s business plan (i.e., he sees
no problem with demand). Handsets are generally split equally among the 3 manufacturers.
Rollout: China (Dec); Brazil (Nov 15); France (Dec); Italy (Nov); South Africa (Jan); Argentina (Nov);
South Korea (Dec); US & Canada (Nov). One caveat was that the FBI still hasn't given G* the
authorization to turn the system on for US & Canada because of security issues. BS was confident a
resolution would be reached....
G* Revenues: Sticking to $600 million revenues for 2000 based upon an AVERAGE of 500,000 -
600,000 users (I'm guessing that means 1 million by YE). BS reiterated that this was depenant on the
phone manufacturers delivering enough phones to reach these levels. Even if they don't increase past
40,000 per month, BS said they should "only" have to revise downward $100 million (i.e., $500 million
revenue for the year).
G* Rates: Set locally by SPs, but the range is $1.30 - $1.50 per minute for calls staying in-country (e.g.,
France - France); $1.50 - $1.99 for roaming calls (I think this meant staying in the gateway, e.g., France to
England); and no higher than $2.99 for a worldwide call. These numbers are ALL-INCLUSIVE (i.e.,
include any and all roaming rates, gateway fees, long distance, etc.).
G* Fees: Will vary with SPs. Some, but not all, SPs will charge monthly fees ($5 - $30), but those SPs
won't likely charge an initiation fee. Conversely, those that don't charge an monthly fee may charge an
initiation fee (no amount set). References were made to "bundled rates", which I think meant a calling plan
(i.e., 50 minutes for $50 - those numbers are mine), but no details were provided.
Fixed vs. Mobile Handsets: For those handsets delivered for 1999, about 1/3 will be fixed and 2/3 mobile.
Thereafter, about 1/4 fixed and 3/4 mobile. Car kits and meritime kits will be available for about 20% of
the initial order of phones (not totally clear on what this meant; 20% combined? 20% each? 20% of the
300,000? 20% of the 1999 phones?).
G* Short-term: BS said that G* won't hit $10 million revenue in 1999 because of the soft rollout.
G* / Omnitracs: Nothing asked or mentioned, although BS hinted about using G* in connection with
Cyberstar for 2-way data transmission at 9.8 kb, basically good enough for a mouse click. No indication
on revenue impact.
My opinion is that the Street will continue to take a "show me" attitude with G* until it produces numbers.
I'm staying long, but not adding to my position (which is half of what it was 6 months ago). If G* hits the
teens again, I'll probably load up if business plan is intact.
Posted: 10/26/1999 3:22 pm EDT as a reply to: Msg 15454 by like_wall_eh |
