cc notes:
call jointly hosted by LBros, MLynch & BStearns.
BLS acknowledged some slowness w.r.t. plan, blamed mainly on phone production rates, mainly at Ericson. Said E production line up now and has shipped 24K phones so far, but type approval for use in Europe not accomplished yet; expects it 15-18March. Said G* only learned of this very recently(!)
Provided new phone production rates for three mnfctrs. Results in about 180K phones shipped by end of June (counting 60K that had been shipped by end of January). Sticking with 600K forecast for y/e 2000, 60K/month rate starting Q3.
Working various schemes to reduce phone retail price on region by region basis, often contingent on commitment from SP to increase order size. Expects will result in 400$ price reduction in several regions (said TEsam already announced this reduction in France(?)
Said problems preventing roaming to be fixed by end of month: intra-Europe (already solved), US-Europe, S.America-US, US-China.
Service to start in Australia 3/31, ads already started, nationwide service by May. Service (commercial?) available now in 42 countries, but most started only in late February.
Said New Zealand would start by end of year(!) Still expect 27-32 GWs.
Vigorously denied liquidity problems. Said Qualcomm vendor financing agreement signed. Said negotiations to xtend 250M$ line of credit to start next week. Doesn't expect any problems with extension. (Note: this is a very old line of credit, with shared guarantees from Loral, LMT and other G* partners; G* is not compliant with revenue covenants which were based, of course, on pre-Zenit schedules.)
One caller said a US G* distributor told him "sold out" of phones. BLS denied that was likely. Said distributor should order more (from Cellstar?)
BLS said there were no cases of distributors/retailers expressing fears about lack of market for service & phones at present price points. G* initiatives to lower same are to meet G* schedule objectives, as opposed to reacting to pressure from retailers.
In response to caller's urging, said mgmt would consider spinning off "cyberstar"
Said data revs this year were forecast to be 140-145M$
Said business was good at FSS and SS/L. Didn't get specific.
Stood by 300M$ rev forecast for G* Y2K, acknowledged slow start making that a little problematic. |
