<BUT, you have to get rid of those greedy SP's lucrative deals!! It makes no sense if the SP's (who have possibly invested the least, still keep their $1 a minute).. One of G* main user acceptance problems is "high per minute pricing" via the greedy SP's..>
This is the crux. It's true that roaming, licences, 200 mile limits, billing glitches and other problems have slowed growth too. But the biggie is price per minute which is absurdly high for a 10 billion minute mobile system which has a huge handset, a huger aerial, a short battery life, limited functionality and other drawbacks.
The service providers appear to think that competing 'remote calling' or 'away-from-home calling' is as expensive or more expensive and therefore Globalstar is a good deal. But although a hotel charged me a fortune to make a call, once, I wouldn't buy a Globalstar phone to avoid that one call. Sure, if everyone knew about it, there might be demand even at the current prices, but they don't.
The service providers have enjoyed a very generous exclusivity agreement. Their contracts perhaps say that they have another half year to run before they can be called on lack of performance, so there is a very hard-nosed negotiation currently underway or looming to decide just what rights the service providers will maintain in the revamped structure.
More money from Loral or QUALCOMM or others would be wasted if there is no readiness by service providers to sell the service at a reasonable price. "A reasonable price" is the price it takes to fill the constellation within 3 years. That is NOT $3 a minute [as charged by Vodafone UK].
Yes, they only charge $2.23 a minute ['only' being an odd word in this context], but they round minutes up and people only use 40 a month so the cost of the phone and monthly charges need to be included in the minute cost [which is what subscribers are wanting from the phone].
40 a month x 12 months = 500 a year.
Phone cost about $1000
Monthly charges - I can't find them on their site, but I bet they have some.
Sign-up charges - I can't find those either, but I bet they have them.
Say the phone is good for two years, then that's about $1 a minute for the cost of the phone. Forget the monthly charges and signups but they would perhaps add another $1 a minute. Oh, and people who phone you have to pay as well and not only do they pay, you have to pay for them to call you.
So, $2.23, rounded up to the next minute = $3 a minute [you disconnect at 40 seconds or 1 minute 10 seconds but pay rounded minute rates - odd since computers can measure time to better than a second these days]. Add on the $1 for the phone and what the heck, let's add on the monthly charge, incidentals and bits and pieces - oh yes, roaming really zooms it up. And don't call weird places which have high charges.
So the actual cost will be more like $5 a minute than 50c a minute which is where it should be [until the system is full].
No wonder demand is slow.
We need competition in service providers, not exclusivity. So, let's see how the service providers are sorted out. They are obviously failing to meet their contractual terms since Globalstar's plan was based on service provider market research and the plan was not to fail.
But even the Loralien service providers are charging absurdly high prices in Mexico and Russia, so the management of Loral is as bad as other service providers. Who in Loral set up joint ventures in Mexico and Russia without the right pricing structure? They need to be set on the straight and narrow too.
The service providers are getting a LOT more than $1 a minute. But of course they are losing money because they are selling so few - since there are not enough rich, stupid people to rip off [the Iridium model]. They forget that rich people didn't get rich by accident, so they aren't stupid and they didn't get rich by being ripped off.
Mqurice |
