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Technology Stocks : Loral Space & Communications

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To: JMD who wrote (4053)7/23/1998 11:01:00 PM
From: Valueman  Read Replies (2) of 10852
 
Mike:

I don't think this is a big deal as far as raw numbers, but it is a further implementation of Loral's plan to increase the revenue per transponder over and above average. Telstar 5 is busting at the seams with business--I guarantee you that they are above the average in revenues. This deal sounded more like a sharing of resources--Loral lets E* use Telstar 5 in exchange for E* letting Loral use their customer service abilities and their ground segment for the DVB biz of Skynet. I would hope that E* would have to pay a lease fee to boot though, since 20 channels+ will use 2-3 tranpsonders at the very least. I think each companies segment will be separate--at least that is what I assume after 3 or 4 readings--but they will share resources. E* can manufacture a box and a dish that they can use, and Skynet can use the same mass produced equipment for their more specialized services. I believe that all the DTH services must, by law, provide service to Alaska and Hawaii--this gets E* off the hook for that as well. As far as quality, Skynet Direct should broadcast just like the Dish Network with equal quality--note the larger dish size though. E* makes the box, and that is where the real processing occurs as far as quality picture/sound. E* gives SkynetDirect the ability to use their sophisticated compression, encoding, uplinking, format conversion and multiplexing abilities=no cap-ex for Loral. I would love to know the exact financial details.
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