I feel I would be shirking responsibility if I didn't chime in here also. The wholesale rates charged by G* will average $.47, while Iridium will average $2.50. This is because the switching that normally occurs on the ground with a regular call will occur in the satellites with Iridium. With G*, the subscriber makes the call, gets hooked into the regular long distance lines via a gateway located within 1000 miles and the rest of the call occurs as if it was a long distance call, including the long distance charges. Iridium believes that they are skipping a number of these charges and thus can charge more. Still, G* will cost about 37% less than Iridium, who must also tack on a variety of country tail charges, gateway operator markups, and service provider markups. The $1.00 price you see for G* per minute would apply only to the case where a person is calling regionally, say from one point in the US to another. In this regional case, G* will be about 45% cheaper than Iridium.
Another point--as international charges get cheaper, G* stands to benefit more than Iridium, making the price differential even greater. It also squeezes margins for Iridium gateway operators.
Satellite life must be taken into account also. Minimum life for G* is 7 1/2 years, Iridium is 5 years. That is a 33% difference--that is significant. Realize that once Iridium turns on service, some of the satellites will already be 20% used. They must immediately start on the next generation, which will eat into cash flow. G* has less pressure to do so. |
