SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : CDMA, Globalstar versus Iridium, Inmarsat, etc.
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Diogeron who wrote (253)8/24/1997 11:23:00 PM
From: Maurice Winn   of 381
 
Diogeron, Iridium can't cut its price just because it feels like it. Iridium has to spend over $4bn to get the system operational, Globalstar has to spend $2.5 bn. They can each handle only so many calls at a time, so divide their capital cost by the number of calls they can each handle. Iridium does space switching, though they have increased their ground switching. Space switching takes up satellite time and power, both expensive and limited.

The capital cost per minute of the Globalstar constellation is much much less than Iridium's. Although Iridium is now talking about $1.75 per minute, that means their business plan is already awry. You ask who knows what the gap will be in a few years? We do know - they have to cover their capital cost and make a profit. Both have to actually work, but assuming they do, the gap will not close by Iridium cutting its price. This is old ground, but worth repeating.

Iridium calls will be more expensive unless consumers prefer the Globalstar system in which case the ultimate indignity for Iridium would be that they have the more expensive system but can't sell Iridium service for as much as Globalstar can sell theirs. Maybe both will be $3 per minute due to huge demand.

Maurice
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News