ING Barings CC notes (additional points)
Hey, I liked it a lot. Good title -- "IRIDF Troubles are No Problem for GSTRF/ICOGF."
1. Bernie significant statements -- G* "high single digits cost" (!!) to deliver service to retailers and G* breakeven cost lower than $.14. Love it. His figures were lower than G* $.14 breakeven estimate by the ING analyst (plus $.07 for gateways cost). I* $1.40 breakeven cost is a big, big problem.
2. Bernie statement, "We want to get service out as quickly as possible to as many people as possible." Maurice, are you happy?
3. Bernie said G* capacity is 12B minutes/year or 1B/month (vs. ING analyst estimate of 7.5B/year).
4. ING analyst referred to recent ITU study. 3.5B people have no phone access. 280M of these people can afford it. Most will get phone coverage thru sats.
5. Bernie stressed the importance of G* powerful distribution partners (VOD, ATI, France Telecom, etc.) versus MOT own marketing/distribution channel. He stressed that ground infrastructure, distribution and service will be key.
6. By 9/99 start of service, G* will have been testing the system for 8-9 months. I* needed all 66 satellites in place to start testing. Bernie repeated that I* isn't really a G* competitor.
7. Bernie said G* needs only 220,000 subscribers to cover all operating expenses. G* needs only 1 million subscribers to cover all costs, interest and pay for G*2 replacement system.
8. Bernie said ERICY will charge $1,100 for handsets at very start, $750 in quantity and $500 ultimately.
9. Bernie said service providers can subsidize the handset costs, e.g., VOD $50 cost to VIP user for handset and all digital/global service with premium pricing.
10. Bernie laid out projected subscriber numbers by big user countries by the end of 2000 with over 1M subscribers.
11. LOR and/or service provider partners will provide $550M G* financing if high yield bond market is unavailable. $785M LOR and $1.4B partners investment already. LOR has $600-700M cash which could be used.
I apologize in advance for any mistakes -- no rewind on this CC.
Damn, that Bernie is sharp. It was the first time I've heard him speak at length. |
