Globalstar Telecommunications Limited GSAT Message Board

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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 60.86

+1.6%

3:59 PM EST

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To: Jim Parkinson who wrote (10006)	2/10/2000 4:49:00 AM
From: Thomas	Read Replies (1) of 29987

Hi Jim, Points well taken. I am not saying that I think that G* has chosen the wrong partners, only that it would be nice to know the terms of those super secret SP agreements. Those agreements allegedly provide for SPs exclusivity being conditioned on meeting performance targets. It sure as hell would be nice to know what those targets are. Obviously it would be unfair to blast SPs for not meeting targets when there are no phones (and I am damn sure that those contingencies are quite well fleshed out in the SP agreements), but I am discouraged by the high minute prices. I am a Winn-ing Auction Model subscriber, and agree with Maurice that the only way to blow the service out the door is by allowing the market to establish the equilibrium prices to sell all those space-rotting minutes, NOT by allowing gouging SPs (just look at unconscionable terrestrial roaming charges) to set the price to maximize their profits (or so they think) at the expense of G* subscribers and shareholders. Of course, it is possible that the performance targets for the SPs (once the system is really hard launched and there are phones available) are meaningful and would translate into a solid business if met (I sure hope so). If the SPs don't meet the targets, set up regional resellers to buy up minutes and sell prepaid cards (should be technically possible, Iridium was considering prepaid cards, but ran out of money before they could develop the capability). That way, G* would at least have some outlet for otherwise rotting minutes and would instill some level of market discipline on these otherwise unruly SPs. Why not set up minute futures and let resellers buy capacity in the future? G* itself has done this with the greedy SPs selling them capacity at discount to get the cash upfront, and allow SPs to further fatten their margins. I say let the auctions begin.

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