JHN: Thanks for the response from Loral IR.
This is why our service providers are existing cellular
companies who view Globalstar as an extra service for their
customers. The cost per minute is far above normal cellular
costs. True, and when a user is within range of cellular
systems, calls may be made with a Globalstar phone in
cellular mode at cellular prices.
Boy they really have a fortress mentality don't they.
Sure the 'marketing' studies showed they could get $1.50 a
minute. But when were those studies done? Back in the dark
days when G* was but a gleam in Bernie's eye. Things change.
I can only hope that they really are not relying on 15 year
old marketing studies!
OK, let's say that G* should be priced at a premium to
cellular. What is a 'typical' premimun you pay for super
duper procucts? 10%? 50%? How much should they charge over
what the consumer is currently expecting to pay? I dont know
but here are some numbers you can use to back out a number.
Econ One: Cleveland Rocks Month Of Falling Prices
By Malcolm Spicer
Wireless service prices dropped across 24 of the top 25 U.S.
markets in June with Cleveland enjoying the heartiest
reductions. A 10.4 percent price drop from May brings the
city's average to $40.16, according to the latest survey by
Econ One, a research and consulting firm that examines
wireless prices.
The average monthly costs across four typical usage plans
(30, 150, 300 and 600 minutes) were $40.64 in June for all
25 markets, down 4 percent from May. The decrease is the
largest one-month change since Econ One began surveying
prices in 25 cities last October.
After Cleveland, the largest drop was in Denver, where
prices were down 8.2 percent, and in Portland, Ore., which
experienced a 7.9 percent drop. Washington, D.C., was alone
among the top 25 markets in showing an average price hike in
June, up 1.7 percent to $41.37. "In the year Econ One has
been surveying cellular plans, never have prices gone down
so much in so many places," says Econ One Senior Economist
Charles Mahla. "It appears that relatively strong downward
pricing pressure came from AT&T Wireless [AWE] (more) and
Sprint PCS [PCS] (more)."
AT&T Wireless' average price across the four usage levels
dropped from $45.82 in May to $39.57 in June. Sprint's
average fell from $45.60 to $43.17.
"The effects of the continuing nationalization of wireless
service also played a role," Mahla says. "Carriers with
nationwide footprints continue to compete vigorously for the
wireless communication dollar, as witnessed by AT&T and
Sprint's rate decreases."
Los Angeles continued as the most expensive U.S. city for
wireless service. However, that city's average of $44.07 was
down 4 percent from May. San Francisco was second highest at
$44.02, down 6.2 percent.
The least expensive wireless market in June was Sacramento,
Calif., with its average of $37.38 down 3.6 percent from
May. Seattle was next with a $37.61 average, down 4.9
percent.
Changes In Average Monthly Charge For Wireless Service
Survey of Prices: June 2000
Rank In June City Avg. Bill Rank In May % Change
1. Los Angeles $44.07 2. -4.044%
2. San Francisco 44.02 1. -6.221
3. Cincinnati 43.48 7. -1.378
4. Kansas City 43.30 5. -2.833
5. Dallas 43.11 3. -4.131
6. San Diego 42.82 10. -0.458
7. Chicago 42.29 8. -2.840
8. Pittsburgh 41.93 9. -3.531
9. Washington D.C.41.37 20. 1.721
10. St. Louis 41.24 14. -1.818
National Average $40.64 -4.027 %
Difference Between
Highest $6.69 17.9%
and Lowest $8.74 22.9%
Source: Econ One Research, Inc. |
