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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 48.26

-5.6%

Nov 6 3:59 PM EST

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To: jim black who wrote (277)	1/19/1998 5:39:00 AM
From: Maurice Winn	Read Replies (1) of 29986

True enough Jim, Iridium has always talked about the high end user and prices more like $3 per minute than 50cents. But also maybe as low as $1.50. If you consider the capital invested and the minutes they have available to sell, they can make big heaps of profit by charging 50 cents per minute and having the system humming. There are few services sold and no products, where the marginal cost of a new subscriber is so near zero. Software involves some time on the servers to handle the download time and that is given away as a loss leader to premium products such as Eudora Pro, or in an attempt to gain customer loyalty so that charges can be introduced, such as Silicon Investor. The long run marginal cost of a minute on Iridium or Globalstar is a few cents per minute. The most important issue is to fill the system quickly. Ripping off a few enthusiasts is not the best way to establish a competitive position. A full system, with customers competing for a minute of service is the way to make heaps of money. I doubt that Iridium will do that though. They will be from the old school of telecoms where profits of monopoly, inefficiency, few calls and governmentalism were the order of the day. Neither is Motorola a New Age marketer. See Qdog's comments re tasslewhatsits. Loral and satellite people in general have been sellers to the military world. Hardly the centre of consumerism, though they sure know how to spend. You are right, Iridium never had in mind the lesser among us with some dollars in our pockets who might want to use Globalstar or Iridium. That means that our dollars will stay in our pockets instead of theirs and they will fly a half empty system. Apparently that is hot shot marketing in their book. Don't lose sleep - stick with things in which you have great confidence. Then you shouldn't worry. Maurice

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