Globalstar Telecommunications Limited GSAT Message Board

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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 62.88

-0.5%

Nov 14 3:59 PM EST

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To: MarkR37 who wrote (12940)	5/18/2000 9:21:00 PM
From: Maurice Winn	Read Replies (3) of 29987

Mark, your sentiments have been fully expressed here. The underlying problem is that the Service Providers totally control the retail price. If they think they can sell all they want to sell at $1.50 a minute, that's what they'll charge. If Globalstar LP was to cut the price to them, they might just keep the increased profit and leave the retail price the same. So we'd lose revenue and sell no more minutes. One way is to set up competition between Service Providers, offering cheaper wholesale prices in return for low retail minute prices, for a limited time. The Service Providers who seriously slash their retail prices would gain market share at the expense of the uninterested. But until the gateways are up and running and Service Providers really ready to sell, there is presumably not enough mileage in that, or Globalstar LP would already have done so. They did include in their arrangements with Service Providers the possibility of joint reductions in price [I saw that a few years ago, maybe in an IPO document or somewhere]. But be consoled that the Service Providers have been cutting prices and so has QUALCOMM and Globalstar LP hasn't given away any wholesale price [other than the bulk sales they arranged earlier in the year for $19m or so]. That is a good sign since it means Verizon and others are continuing to develop momentum in G! and not whining at or depending on G! to cut wholesale prices. Maybe they did whine and G! told them, quite correctly, to get lost and comply with their Service Provider business plans or lose their gateways and exclusivity. I'm all for a jointly, dramatically reduced minute price, but I mean joint! The Service Providers are way out of line with their retail prices and have apparently started to figure that out. Be assured they aren't idiots. Idiots don't get $4bn CDMA satellite systems up and running successfully, which G! is. The need is for Chris Gent to really push his Verizon crowd to make G! happen and happen fast. I think he understands the need for that. Maurice

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