I never said Iridium's pricing would be low out of the gate. I think there is so much demand for this system that they will not have to lower prices.
Secondly, if/when sats fail, there's nothing to stop them from replacing them out of current revenues. Iridium is not a one off deal, and remember a lot of the 4.5 billion you're talking about is non-recurring costs. Operationally, they could be quite profitable at $1.33 a minute. If you change your numbers to include $3 a minute for the first 3 years (at half capacity) and $1.50 a minute for the next 8 years on a total investment of $6 Billion you have 24.5B return on a 6B investment-- and that's the first 11 years, the next 10, figure the price of replacement sats is much lower and it costs $2B and you get a return of $11.25B on your $2B investment at a per minute cost of $0.75.
Another factor to consider here is coverage area. Now that I've found out that Globalstar isn't really global, how much isn't covered? We've already got parts of norhtern canada, the north sea, the south sea, both poles. How about the middle of the ocean? Readware said once that "of course Iridium gets the maritime traffic"... ok, then since both systems will be using Cellular when you're in range of a cellular service provider, they are going to be competing for business of people who need service when they aren't near a cellular system. Since the ocean makes up 3/4 of the total surface area to begin with, when you take out the land mass covered by cellular, it seems there's a lot of the world where you won't be able to get Globalstar service unless they start putting more groundstations out there. I cannot find a description of what areas will and won't be covered in any of the info they have sent me.
Personally, I hate the thought of paying $3 a minute, but for my needs (sailing around the world) Iridium is the only option. I think there are a lot of companies that work internationally that will have the same limitation. Even if your business is land based, your people will often be over water or maybe even in a region where there isn't a globalstar gateway nearby. (How many gateways are there? I remember hearing 30 originally, but that its much fewer now...) |
