Thanks for correcting me on the danger of a launch failure. I've been looking at other risks, and I think competition will be the second biggest risk:
"Based on falling long distance rates and price competition, we have lowered our assumed pricing to $1.33 per minute, falling to $0.76 by 2006. We continue to assume Iridium will invest substantially to capture subscribers, beginning at $750 per new subscriber in 1998, falling to $300 per new subscriber by 2003."
This is from a Merrill Lynch report on Iridium. If Globalstar is charging $0.47 a minute to the providers, and the call is ultimately routed on terrestrial long distance lines at an additional cost of $0.30 to $0.60 a minute (or more) then the prices for a call on both systems get pretty competitive. Remember, since Iridium routes the call between satellites, whether the destination is a POTS or Iridium phone, there isn't a long distance charge added, the call just routes down the gateway local to the POTS phone on the destination end.
So, in the longer run, I think the price difference will be a wash. Globalstar has an advantage in signal quality and having more motivated local reps, Iridium has an advantage in coverage and better latency.
Dragonfly |
