Globalstar Telecommunications Limited GSAT Message Board

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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 56.80

+0.2%

Nov 21 9:30 AM EST

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To: SKIP PAUL who wrote (9213)	1/5/2000 2:21:00 AM
From: Maurice Winn	Read Replies (1) of 29987

Skip, < $1.5 a minute is peanuts if you can complete a critical call. > That's true, but the big question is how many mission critical minutes are needed. My guess is that to sell 10bn minutes a year within 4 years [the existing 6 year plan is too slow] and 20bn minutes a year within 8 years, we need to move down the price elasticity curve a LONG way from mission critical minutes and get into the 'yakking to each other' minutes. That's where the megamoney will come from. When the price can be reduced to something like the hourly rate which people can earn, then we hit the super big time. Sure, start at the high end [as long as sales are flat out and all the handsets are sold at high prices] but aim to move down the line quickly. Globalstar can easily, on the second constellation, get the minutes down to yak-a-lot prices. I'd rather sell 30 minutes of gossip at 20c a minute than 3 quick, mission-critical minute at $1.50. The first would bring in $5 profit. The second would bring in $3 profit and let the competitors in and reduce total benefits to subscribers. The concept of phone calls as a premium way to talk needs to be removed. The value of talking in the normal course of events is broadly equivalent to each person's earning power. So, a person earning $20 an hour would value yak-a-lot calls at about $20 an hour. Of course the amount they pay is a function of competition too, but in the absence of competition, which Globalstar has, the optimum to charge needs to be found. I bet it's a lot less than $1.50 per minute = $90 an hour. It needs to be nearer $30 an hour to reach the big time. We'll see. Maurice

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