Steven, excellent analysis. One point
Unfortunately, the 9+ month Zenit delay has allowed other wireless companies the opportunity to grab customers G* might have gotten and build out new systems
I'm trying not to be too boosterish, but I'm not sure I really agree. Satellite mobile telephone service covering a state/nation/worldwide at $.65-$1.00/minute with under $.10 cost -- there will be no competition from 9/99 to at least 08/00 (if ICO gets its financing). I* with its $1.40 breakeven costs, $3000 handsets and high cost/minute is really targeted at a different market.
More importantly, given G* distribution model through top-notch service providers (e.g., VOD/ATI), in the last 9 months, the SPs have added millions and millions of new subscribers who are potential G* users. In addition, many areas of the world where G* is expected to do well have better economic prospects (now and 2000-on) than projected 9 months ago. My thesis -- worldwide economic recovery helps G* and isn't reflected in G* share price. And, as Maurice has pointed out, the handsets/batteries/etc. should be improved over what could have been provided 9 months ago.
So, my theory is that the 9 month Zenit-induced delay increased G* costs and shareholder dilution, but may have been an unintended benefit for the above 3 reasons. The key is a fast, effective rollout and marketing program. I keep coming back to the 225,000 users to break-even, 1M users to pay all G-1 costs/G-2 constellation, and the rest is... |
