Larry, Globalstar Telecommunications Limited is currently at 30 million shares, [maybe 33 million - I couldn't pin down whether some loans were convertible]. GSTRF market capitalisation is therefore $1.2bn. That only represents 22% or so of Globalstar LP, so Globalstar LP on that basis has a market capitalisation around $6bn. Constellation cost is $2.5 bn, so they are 2.5x the cost of the system.
Iridium at $40 per share and 12 million shares would be $480 m and that is 20% of the Iridium system [is that right?] so market capitalisation of Iridium is $2.5bn. So there is a lot of debt in Iridium.
The relative market capitalisations mean investors are expecting more profit from Globalstar. You can buy all of the big 66 satellite Iridium system for only $2.5bn, whereas the smaller 48 satellite Globalstar system will cost you $6bn. Why do you think that might be Larry? Since the Iridium system costs twice as much as the Globalstar system, you'd think it would have a higher market capitalisation. I didn't think the debt for each system was greatly different. Maybe Iridium is full of debt? No wonder the lenders wanted 14% instead of Globalstar's smaller interest rate.
Larry, being too busy to properly investigate investments is not the road to riches. While the world does look very wet, you need to take a more detailed look at the number of islands and their placement to get a good opinion of how well Globalstar can provide worldwide coverage. The major drawback of some of the island gateways is that the need to pass the call on to Geostationary satellites will introduce voice delay. Maybe Iridium would like to act as carrier for remote Globalstar calls? Another profit opportunity. Quite a few islands will have fibre though, so I don't think it's a big problem.
Cyberstar cannot compete with Globalstar because ALL geostationary systems have voice delay. That is a big pain and callers will not tolerate it. Maybe Cyberstar can provide the solution to the remote Gateway problem which Globalstar has, albeit with voice delay. It might be that Iridium is the preferred supplier to places like Tristan da Cunha in the south Atlantic. I doubt that it is economic to put in a gateway for 50 sheep farmers or whoever lives on that island. Looking at the globe, it is amazing the nooks and crannies where people eke out their lives. The Kiwis at Scott Base [Antarctica] will have to use Iridium.
True, many people don't concern themselves with a few dollars on the phone bill. But they expect some benefits from buying the most expensive system. Having a phone that works in the Antarctic or on Tristan da Cunha won't be important to nearly all of them. They will look for other benefits. And believe it or not, the "Global Business Community" don't have freedom to buy anything they like no matter what the cost. They will consider battery life, weight, size, brain cancer, voice quality, hearing aid interference, pacemaker disruption, caller identification, easy dial, button size and feel, appearance, waterproof, in use phone heating and many other variables. Call cost will definitely be on the list. Globalstar starts with several advantages. Cost being a very important one.
Mqurice
[Larry, I really don't think many people at all will go vacationing in the south Atlantic!] |
