Globalstar Telecommunications Limited GSAT Message Board

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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 56.92

-10.6%

3:59 PM EST

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To: Maurice Winn who wrote (14446)	7/17/2000 6:51:10 AM
From: KyrosL	Read Replies (1) of 29987

One can argue that the G* pricing strategy of the last few months makes sense: Start with relatively high prices in the largest market (US), just in case the market accepts these prices and takes off. At the same time offer the service at lower prices in similar but much smaller markets (Canada and Australia) to test elasticity of demand. This way you don't leave much on the table, in case the US high pricing works. The basic assumption here is that you can't easily jack up prices in today's markets -- your customers will cry gouging and may very well abandon you. Now, after you see that the Canadian and Australian pricing works and the original US pricing does not, lower the US pricing to match the Canadian and Australian pricing. The lowering of the US prices comes at an opportune time. When the 2nd Q MOU and subsciber numbers are released in August, G* can release some, presumably favorable, data of how the new pricing plan is working in the US to mitigate the, presumably bad, 2nd Q numbers. Kyros

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