Inmarsat IS the competition.
1) Inmarsat costs more now because they are the only game in town. What stops them from lowering their retail price? I believe their profits (before taxes and charges for ICO loss) are about 25% of their revenues, that suggests some wiggle room in pricing.
2) Consider the G* discussions where handset revenue and MOU is thought to be insufficient. The true believers always reply with "oil rigs, pay phones, cruise ships." Well guess who is ALREADY on oil rigs and cruise ships? That's right. And guess who can be responsive to GSTRF pricing IF GSTRF ever makes inroads into their business?
******
Some more positive comparisons:
1) Their are 183,000 INMARSAT phones out there, as of INMARSAT's last annual report (they do report results, inmarsat.org ) Since INMARSAT service is more expensive than G*, and the "handsets" much larger, that DOES suggest an EXISTING market of at least a few hundred thousand for G*.
2) Could INMARSATs cost structure just be higher than G*? They are able to justify expanding capacity by launching new satellites at current prices. Could the economics turn on its head if G* is successful at its current pricing? One can only hope that this is true, and that G* figured this out BEFORE putting N $billion of LEOs into the air.
SUMMARY
IF INMARSAT's cost structure is significantly higher than G*, AND G* is able to find its market THEN G* will succeed. HOWEVER, this doesn't say current stockholder's will benefit, G* could still succeed, but after flushing a few $billion in debt along with current equity (i.e., reorganizing out of bankruptcy).
To the moon,
Ralph |
