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Technology Stocks : Loral Space & Communications
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To: Larry L who wrote (2481)4/4/1998 12:46:00 PM
From: dougjn   of 10852
 
When I first heard about G*'s plan to go after the rural underserved (not from B.Schwartz directly, but from a skeptical analyst debating a bull on CNBC perhaps a year ago), I was very skeptical about G*'s business plan.

I've long since become bullish on it because 1) I think G* is gonna get a large part of the international business traveler as well; and 2) I'm thinking about that underserved rural market differently now.

I mean, I don't think its gonna be the impoverished farmer in rural India that gets the phone. More likely, its the policos trying to get their votes on a swing through the countryside. Government everywhere. Urban based business communicating with their more rural outposts. Etc.

The regional satellite competitors you refer to have one major problem. Actually, several. (They are all based on GEO systems. The only LEO systems on the boards are I* and G*.) The nature of the GEO beast is lots of latency issues. Which means bad voice delays. Very bad. Also large antennas. To reach that far. GEO is a couple of orders of magnitude higher up. Has to be to stay in one place. (Relatively speaking.)

Now really bad voice delays might not matter enough for the less than flush if the price differences are great. But I think G* actually has room to lower its prices a lot, if it needs to. And besides I think its gonna turn out that most of G*'s market is actually mobile as well. That is the direction of their surveys, in fact. More and more. Due to high mobile demand more than weakening fixed rural.

But sure, a technology that defeats voice delay issues as well as antenna/power source size issues for GEO sats could be a big problem. For both systems. Don't see how latency can be overcome however, given that thingy about the speed of light and all.
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