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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 56.92

-10.6%

3:59 PM EST

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To: dwight martin who wrote (1419)	7/7/1998 2:47:00 PM
From: Dragonfly	Read Replies (1) of 29987

Iridium has (apparently) done deals with a number of airlines to replace the in flight phones with one using the iridium system. So there could be an external antannae if necessary. I would suspect that an iridium phone would work anyway inside of a plane, aluminium is not equivilent to a huge rebar building with steel sheets on the side of it. The ability to service flights over the poles and over all the major oceans is significant to iridium. There are many flights that it is much more economical to make- Seattle to Warsaw for example, would be a number of very long legs if you didn't go over to pole. Over the pole you can go direct. And of course, there is a lot of air traffic over the world's oceans. This doesn't detract from Globalstar because they are pursuing a different strategy. Its not like they "lost out" in-flight phone service- their service wasn't designed to handle it. I've started to take a new perspective of the situation. If you look at the market as a pyramid. At the top you have the most expensive part of the market, but also the narrowest. As you go down the pyramid, your "base" gets much bigger, but your income per subscriber goes down. Iridium has gone after the top of the market- the ones that HAVE to have the service and HAVE to be able to go anywhere and don't have to watch their pennies so much. Since these people are in dire need of the service, they will pay a premium and there is less risk in this market- its defined. Globalstar is targetting lower on the pyramid- people who don't necessarily HAVE to have a global phone, and are more sensitive to prices, but are a much broader market. I think iridium has a safer cross section- the easy sales. But Globalstar has a much bigger cross section- many many many more sales. If you think the market as a whole is going to be small, then Iridium is a safer bet. If you think the market is the next wave, then Globalstar will make much more money and Iridium will be only "wildly successful". I think most people fit in this latter category, and I'm one of them. Dragonfly

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