Larry, okay when I re-read my stuff, yes you are right, M-Star is supposed to be data, video etc which I didn't even mention, which was wrong. But I don't believe that they won't add voice into the package. I can see no reason to exclude voice. It wouldn't be good for Iridium during its launch phase and capital formation to be saying that Motorola will be introducing a competitor to it. I certainly think that Globalstar is going to have competition from M-Star.
Just about having one leg on either side of the fence, Globalstar has a lower cost system and therefore can compete on price as much as is necessary. But the pricing has always been average $0.45 wholesale with about 10 cents either side of that. But service providers in each country are allowed to charge what they like. There is provision also for agreement between Globalstar and the service provider to share price reductions. The competitive advantage doesn't necessarily show up in hugely lower prices to subscribers, it can show up in improved service because Globalstar will have the higher profitability to enable subsequent constellations and technical improvements.
The $1.75 per minute for Iridium sounds more reasonable than the $3 they originally planned. But imagine what that does to their business projections. For Globalstar, by the time you add in the service provider's charges and the "tail" I think they call it, which is the terrestrial carrying of the call to the person being called, the cost for an international call will be about $1.10 per minute.
Iridium calls can only be as cheap as Globalstar where true economic cost is made irrelevant by governments charging excessive prices for terrestrial transmission. With the international deregulatory agreement coming up early 1998, this is going to be far less of a problem than it might have been. Basically, fibre is cheaper than satellites for carrying international traffic.
I'm not sure that call prices will be Globalstar's only true competitive advantage. CDMA call quality is notably high and I expect the same will apply to satellite CDMA. Battery life should also be an advantage.
Upgrading gateways and satellites needs to be done in two ways, hardware and software. As you say, software is really no problem as you can sit at home base and email the latest bug repairs and that applies to both satellites and gateways. But new chips and other electronic gizzardry is another matter. Gateways are really no problem. Even 100 is no problem because you can just post out the new gizzardry and plug it in.
But satellites!! Iridium satellites are sophisticated, complex and spectacular manifestations of technology for in-space satellite to satellite transmission. Globalstar's satellites are certainly cunning enough, but "bent-pipe" just doesn't sound too complex to me. I don't think hardware upgrades to them will be particularly vital.
The difference between Globalstar and Iridium earth stations? I guess there shouldn't be much at all technically. Globalstar chose to keep equipment on the ground where it can be accessed for upgrade. Iridium chose to go with a fixed life satellite. I think that upgrading gizzardry by standing on the ground and opening the hatch will be a lot cheaper, even for 150 gateways, than mucking about with 66 satellites and the gateways too.
Anyway, why does Iridium want gateways? For controlling the satellites I suppose, or are they going to sneak signals down to earth for cheaper transmission around fibre? I don't think they originally had 11 gateways planned. They had more satellites.
In any event, the new stockholders of both Iridium and Globalstar are giving the thumbs up! $40 apiece for the two stocks [near enough].
Mqurice |
