<August 7 1997
Dear Shareholder,
I am pleased to report that Globalstar is making substantial progress on all fronts. As our activities accelerate in anticipation of our first scheduled launch in early December 1997, we are meeting all of the milestones we set for ourselves in order to initiate global telecommunications service in late 1998. From space and ground system deployment efforts around the world, we continue to hit our targets. Our enthusiasm and confidence in the Globalstar system have never been higher.
etc...
When we embarked on this project seven years ago, we recognized that while the risks were high, so were the rewards. ...cont...>
Bernard L. Schwartz report to shareholders.
Well, that's three years ago and a LOT has happened since then. A LOT of targets have NOT been hit. Out of three years, we lost one! They initiated service in late 1999, not late 1998. Now we have lost another. The number of subscribers is going to be a year behind where it was expected only at the beginning of Y2K.
The risks have loomed large. The most fatal risk of all, not enough customers, has become the only real risk that anyone talks about these days. It's enough to keep us all on our toes and edge of seats [though I notice I'm actually leaning back comfortably right now].
There are no other risks. Even competition, which is the second biggest risk, has gone, which is a very, very good risk to have disposed of. It would be worth doing badly for a year if that stopped the competition. ICO certainly got a fright when they saw Iridium conk out so that was a big competitor disposed of. Sure, ICO would have provided oceanic and polar service where Globalstar couldn't, but Globalstar can provide oceanic and polar service in later constellations.
There are only roaming, licensing, new gateways and tidying up left to do now. The big stuff is all established. Globalstar HAS got worldwide spectrum rights. Huge swathes of the world are already covered. The phones work very well. There is no voice delay. The quality is excellent. The satellites are performing better than expected with a life expectancy of 10 years instead of 7.
Globalstar has many service providers now selling the service. The world's economy is booming. The technological pathways for further Globalstar development are wide open, with fibre ringing the world for near-zero cost terrestrial transport of signals. Remember that every gateway is on fibre, so there is no copper in the way of a Globalstar call or WWeb link [other than to landlines]. The fact that fibre is the link, totally vindicates Globalstar's decision to use terrestrial rather than space switching [like the doomed Iridium]. The long distance component of Globalstar calls will approach or reach zero. Globalstar almost defines the fibresphere [it sure is spherical].
All technology pathways benefit Globalstar more than competing systems [such as terrestrial wireless]. For example, Globalstar has a big battery problem. Terrestrial cellphones are so small now with such good battery life that it isn't very important that better battery life be achieved. Sure, it's necessary, but okay at the moment. Globalstar on the other hand, has rotten battery life, so when methanol fuel cells [or even ethanol] are available in a couple of years, Globalstar phones will suddenly never run flat [topping up will be easy, cheap and instant].
When I think about it, 3 years isn't all that long and a lot has happened since that report from Bernard Schwartz, including a one year delay due to Zenit wrecking quarter of the constellation.
Even comparing what we have now with a year ago, things are looking very good.
Now, we just need some serious marketing.
Mqurice
PS: The train is pulling out of the station... the bell was rung 17 August Y2K... Message 14277608
It's a big train, which gathers speed slowly. So there are still people climbing on board. The Thanksgiving Day short squeeze isn't for another couple of months yet, so I guess there's time before the rocket ride. |
