Tero, numbers from Brazil will be interesting, indeed, (I remember BLS saying he expected 1-2K subs in the first month alone), but no one should be surprised if numbers in Europe are low....it's the worst market on earth for G*, obviously, especially in the absence of ERICY phones and maritime kits.
What killed Iridium was not failure to meet the expectations of equity investors...it was the failure to comply with loan covenants. G* has 11 months before that's going to be an acute problem.
IMO, what mgmt needs to do is distinguish between "slow start" caused by regulatory delay and local SP issues, as opposed to "slow demand" because the product is not attractive at current price point. It's obvious we have had a "slow start" relative to Sept99 forecasts. These delays have no obvious connection with demand. The anecdotal evidence of demand in places it can be observed (N. America and Australia) is pretty good, imo. I'm very encouraged by the large number of local distributors and/or wireles operators that are offering G* in US, Canada and Mexico. It's obvious, too, that Vod Australia thinks it has a winning product with G*. S. America is unknown; China, Russia, S.Africa and the middle east haven't started yet.
So, management has done a bad job setting up reasonable expectations, and then fulfilling them...it deserves criticism for that. OTOH, when it has needed to raise money, it has done so on pretty good terms so far. By the time (if it ever comes) that it has to raise more cash, there will be pretty compelling evidence of G*'s future in the form of real MoUs and revenues....in the meantime investors, short or long, have to deal with a lot of uncertainty. |
