IRID - Iridium World Communications IPO Announced! Message Board

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Technology Stocks : IRID - Iridium World Communications IPO Announced!

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To: petersterling who wrote (2607)	3/21/2000 1:16:00 PM
From: ML	Read Replies (1) of 2693

...anywhere for no real cost. Thus it could easily have offered consumers prices of 10 cents to 20 cents per minute for international calls No real costs? Suppose the Irid satellites have a 6.6 year life. (Real life is anyone's guess, but this choice makes the math easy.) There are 66 satellites, so if life is 6.6 years, you will have to replace 10 satellites per year on the average just to keep the constellation whole. If building and launching a satellite costs $30M, then you have $300M/year just in constellation maintenance costs. It probably takes another $100M/year to administrate, market, and generally run the associated worldwide organization. Now we're up to $400M/year in costs. The Irid system (according to Irid) can handle 1 Billion minutes of calls per year. Presume they sell all the minutes. Divide $400M costs into 1 Billion call minutes, and you get 40 cents/minute in hard costs. From this calculation, it is difficult to see how anyone could get a business plan to be profitable while selling Iridium calls for 10 cents per minute.

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