I have been listening to this rationalization about how Gilder is free from blame, and that everyone should take responsibility for his or her investments. Gilder provides an investment advisory letter which people pay money to his organization to research companies and report to the subscribers the best ones. He has been touting G* throughout Y2K. As late as this X-mas in a telecosm lounge post he alluded to some upcoming surprises which would bail G* out. Remember he has personal interviews with all of the CEOs involved with G*.
In this latest newsletter he mocks the marketing and the pricing of G* MOUs. To me he is backpedaling, and trying to cover himself, which I do not appreciate. The fact is he blew it. The following is sniped from his site. Notice that the price per minute is not that far from current levels and it doesn’t take a Rocket Scientist to figure it out, even though we do have one on this thread.<GG> I must point out that while this is currently on his board, it came from one of his newsletter excerpt almost a year ago.
Globalstar Acceding
The opening price of Globalstar minutes will be one-seventh of Iridium's price, and the Globalstar network remains 19 times more cost effective. Inflation adjusted, one dollar per minute was the average price of Long Distance Telephony in the United States just 25 years ago. Incomes adjusted, the Globalstar price will be cheaper than most local telephony around the world just 5 years ago.
Globalstar will begin by charging thirty-five cents a minute for most wholesale links; its partners will probably set the price at about a dollar a minute. At those prices with just 400 thousand customers, Globalstar can break even. The system can currently accommodate 4,000,000 users. That means under $1,000 in total capital outlays per customer, less than the cost of laying a twisted pair line to a home. A Globalstar customer will soon cost less money to service than a wireline phone customer who pays less than a tenth as much per minute.
As the only way to reach the entire surface of the globe at once, satellites play a key role in the paradigm. But their advocates often misjudge their real promise. The currently dominant geosynchronous birds in the Clarke orbit 23,000 miles away will lose nearly all their network long haul trade to fiber optics. At an estimated 8.6 petabits a second, a single fiber cable with 864 strands could hold more potential bandwidth than all the satellites, aloft or planned, put together. For point-to-point services, satellites are relevant only where fiber does not reach. Fortunately for the satellite industry, fiber reaches only a tiny portion of the world's destinations. Almost totally dominant for backbone services, fiber is sparse in the
last mile. Thus rather than the links of the net itself, the best market for LEOs is the rich arena of links between customers and the net. Rapidly losing their remaining long distance applications to fiber, satellites-though hundreds of miles above the surface of the earth-are emerging as major players in the "last mile."
Cojones Anyone?
So what do you want first, the good news or the bad news? The bad news. Globalstar's stock has not shot through the stratosphere. The good news? Globalstar's stock has not shot through the stratosphere. That's right. The good news is the bad news. It's not too late to ride this one, cowboy.
"But George… why hasn't Globalstar shot up? Is there a problem you're not telling us about? Why hasn't it 'done a Qualcomm?' "
Calm down. It's going to be all right. Globalstar's stock is down because of the aftershock of the TDMA failures at Iridium and Teledesic. Around here, this is not exactly a surprise. We are not market timers. But as a historian, I note that Globalstar is an ascendant technology, and that the stock has yet to ascend. You do not have to be a rocket scientist to recognize that such a discrepancy between potential and kinetic energies-such an underestimation of CDMA and bandwidth demand-historically supplied the voltage for the explosive ascent of Qualcomm. As for Globalstar, its day will come!
Best regards
Bob
BTW I still believe G* is going to make it and bought some more today. Also, I havn't given up on Gilder, I still think his original thoughts are correct. |
