KJ, Globalstar LP is owned by various companies who have contracted with it to provide various services such as satellite design, service provision, telephony design, launch management, operations, etc etc.
Loral is the manager of the whole thing. They have staff who work for Globalstar and staff who work for Loral and a Chinese wall between them. Globalstar Telecommunications Ltd doesn't do anything except watch from Bermuda and hope it makes money.
And here is a post from Loral thread, on the most important issue. I've tried to explain the subscriber pricing by auction concept but I don't think anyone understands what I mean or sees the absolute need for it. Buyers decide the price by accepting what is offered or rejecting it. This is a fundamental principle in all transactions other than those created by governments at the point of a gun through taxes. If there is a disagreement on value, the seller has to either lower their price or stop producing the goods. Globalstar can't stop producing the goods. Once the satellites are up, they are there. Therefore, the price gets set by the buyers in competition with each other. The best way to do that is to give them free rein - not restrict them to some set price.
There is NOT manna from heaven. There is no cargo cult worth following. Priced incorrectly, Globalstar and Iridium can BOTH fail.
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From: dougjn Sunday, Oct 26 1997 10:21PM EST
Reply #1335 of 1336
Scott... Athough I sent the following earlier this evening to Readware on <babysteps> AOL, I can always hope that you or another reader here can answer some of these questions:
Readware - I am writing you for obvious reasons. You have amply demonstrated that you know what you are talking about in the SatComs area.
A number of potential or posited issues w/respect to Satcom systems seem to me, as I know they do to you, to be non issues:
The birds will get into orbit. Sure, an occasional rocket may go boom, or other mishap occur, but there is insurance, and the rate of failure is much lower than commonly supposed.
The systems will work. I* will work. G* will work. The technology may need tweaking on both systems, especially in the areas the media has for the most part neglected, such as billing and landline interface software in a polyglot world.
G* has a very large cost advantage. G* cost less than half as much. Which lowers the system amortization costs accordingly. Additionally, G* has about 3-6x the capacity. Which raises the upside potential of the investment accordingly.
G* also has a large handset cost advantage. $750 vs. $2000-3000 for I*.
But the areas that remain as issues to me are:
Is it really clear that there is neighborhood 2.5m subscriber demand for G* at a retail cost of 1.00-1.50 minute, before any long distance charges, in the year 2002? This to me is absolutely critical. You have said it is clear. But can you cite any Web source backup? I believe you, but where my money is concerned, I like to check out all the
key issues myself..<g>
Critical also is a discussion of: to what price could the local gateway operators (who recall are paying perhaps $.45/min to G* to use the birds and system from their owned ground station) actually Afford to lower their price, if volume considerations dictated that approach.
Where, typically, will the local/long distance charge breakpoint come? What I mean by that is this. Seems to me the one clear theoretical advantage the I* system has is bypassing the locals on long distance toll charges. (That is, its an advantage where I* is allowed to operate.) That advantage diminishes if a G* gateway operator does not
have to charge long distance to connect to anywhere w/in his domain. Or is it on the other hand as bad as this: You make a call from the US Virgin Islands. You are calling Puerto Rico. The ground station is in Texas (that is REAL). Texas ground run by Airtouch charges you its $1 connect charge/min and because you are not making a LOCAL call, charges you the LD rate from Texas to PR? I think it is in these kind of cost details that the systems will either succeed or fail, or if
succeed, either limp or kick A.
In communications, I think, cost is everything. If Internet access in the home (combined ISP and phone charges) cost typically $.25 per minute, versus $20 month flat rate, added only to local phone line cost plus either no local charge at all or at worst, a cents charge per connect (never mind how long you're on). how crazy do you think the Internet would be then in the US? The model I'm positing in contrast is about $15/hr.
As a reasonably well off individual, I can tell you it would have dramatically curtailed my initial vast exploring. And even my current use. (Although some of my financial use is so valuable that it would continue, at a much more parsimonious rate.) Europe's vast lagging of US Internet use has been due in large part to these kinds of pricing problems. Maybe not .25/min aggregate, but often .10. Or more.
(Consider yea all techno lovers this query.)
Regards, Doug techstocks.com
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