An interesting perspective on IFN, from Gilder Telecosm Room.
Just wondering about the potential size and scope of Globalstar's In-Flight Network deal. In 1999, the 10 major U.S. carriers transported 553.8 million passengers. Apply these numbers to polling statistics appearing in an article posted today and consider the potential results:
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BELLEVUE, Wash., Aug. 9 /PRNewswire/ -- Travelers have a strong interest in inflight e-mail and access to Internet services, and a clear willingness to pay for use of these services, according to results of a new survey released today. The same study demonstrates an interest in the entertainment value of this medium and reveals a genuine interest in on-line shopping during flight.
Fifty-five percent of those surveyed said e-mail is the primary reason why they would utilize this new service.
The majority of respondents, 77 percent, are willing to pay to send and receive e-mail if they know the associated costs ahead of time.
Among the prospective areas respondents would "use" this new service are: e-mail (80%), weather (75%), news (63%), and stock quotes (49%), travel (46%), reservations (45%) and entertainment (41%).
During a two-hour flight, almost half of respondents (49%) would spend 30-60 minutes of their flight time using this service. Not surprisingly, this time nearly doubles among the majority of respondents (92%) with a flight more than two hours long.
"This isn't about introducing a completely new service and then having to convince people to bring their laptops. They're already doing it," Bruner said. "Travelers have a need for this today, not two years from now. For the business traveler, it makes efficient use of that downtime on an airplane."
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No suprises here, but consider the staggering MOUs this usage could generate for the Globalstar system. If 50% of the 1.5+ million average daily air travelers spent an average of 30 minutes online, they would generate 22.5 million MOUs of usage on a daily basis. Over the course of one year, MOUs would exceed 8.2 billion. And these numbers only pertain to the ten largest US air carriers, let alone the rest of the world's air carriers. If In-Flight Network were successful in securing 20% of the US air carrier market, it could potentially generate 135 million MOUs monthly for Globalstar. At $0.45 per MOU, this amount of airline usage would generate $60.7 million in revenues monthly and nearly $730 million annually for the Globalstar system.
With the enormous potential of the In-Flight Network deal alone, it's amazing Globalstar's stock has not yet caught fire. Am I missing something? |
