***ICO - Here it comes*** Looks as though Craig McCaw and Subhash Chandra are going to take a big chunk, bail it out, put more in and make it happen. Message 12195508
That means Globalstar will have competition. The good news is that the first ICO constellation will be funded only because of the huge capital write-off. So a second constellation won't be justified unless ICO makes a huge success of the first and the full capital cost of a new constellation is justified by market demand. The bad news is that McCaw will be able to price the first constellation minutes at cruelly competitive prices, slashing Globalstar prices to ribbons.
A good lead time is being rapidly whittled away. Yet another copy of Iridium's failure mode. For all the boasting of learning from Iridium, there seems not to have been a lot learned. There is a lead. It should be used by getting a LOT of customers in a frenzy, not a liesurely yawn into picking up the odd one here and there, sometime in the first half of 2000. True, there won't be many customer complaints about service and that is a good point.
Even Iridium is going to survive by the look of it, but at least they have only 1bn minutes to sell and they will definitely not be building a second constellation once the first decomposes.
I suppose I should be glad that ICO will start operation because New Zealand will get satellite service. Globalstar's attitude to marginal gateways is that they will not be built until demand elsewhere has grown to such an extent that roaming will justify the construction of marginal gateways.
Meanwhile, 12bn minutes per year, a billion a month, 30,000,000 a day, 1 million an hour, which is half a million dollars an hour wholesale or $1.5m per hour retail are being lost forever. That's a very, very large financial loss, or opportunity cost if you prefer.
Maybe a few customer complaints per hour would be okay if we could get that $1.5m.
Maurice |
