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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT
GSAT 59.35+4.5%11:56 AM EST
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To: SafetyAgentMan who wrote (3829)4/11/1999 1:51:00 PM
From: djane  Read Replies (3) of 29987
 
On the fiber is gonna kill MSS argument. In the last couple months, there has been a fairly well articulated argument by I*/G* shorts (taking advantage of I* slow roll-out problems) that the faster than anticipated fiber build-out (using cheap handsets to access the fiber to provide IP telephony service) will take most of the MSS customers and lower the I*/G* subscriber projections.

The responses by Bernie/G* execs/ING/Gilder have been:
1. MSS will be complimentary to fiber and serve as another very valuable access point to fiber. In other words, more cell customers ultimately mean more MSS customers.
2. Fiber will be limited to major cities and then possibly to secondary urban areas due to cost/geographic considerations. Why build out fiber to secondary areas as MSS gets cheaper/faster/smaller/better.
3. Rural fixed telephony. No competition from fiber. 3/31/99 ING report said service providers estimate 25% fixed phone booth ratio.
4. 2nd/3rd generation G* constellations will have increasingly lower costs (10x lower launch/equipment costs) and higher capacities (e.g., data/Internet capabilities).
5. MSS as gap filler even in developed countries due to swiss cheese cell coverage. Many US/European/3rd World cell customers will buy sat coverage as insurance to protect family members when outside cell coverage.
6. 40M current possible MSS customers and what X multiple in the years 2002-2003?? G*-1 system will be very, very profitable with 5-7M users worldwide which is a small segment of addressable market.
7. G* as Y2K play. 3rd World telecoms/govts/corporations/elites will buy lots of MSS handsets (G* 10X lower cost than I*) for Y2K insurance. My theory is that they will come to depend on MSS due to higher reliability than existing landline and cell coverage/gaps.
8. djane bonus theory. To the shorts, why aren't you concentrating your "fiber is gonna kill MSS" firepower on the conventional cellular carriers? The fiber/WLL build-out will be concentrated in the major urban areas of the world and thus increase competition in those areas. Wouldn't that make the MSS carriers that much more valuable because they provide necessary coverage in areas with limited competition?
9. LOR/G* buyout. A truly global telecom will have to buy LOR/G* to provide truly global coverage. Doesn't anyone else see LOR/G* as a perfect addition to a carrier such as AT&T, MCI Worldcom or a combined European carrier?

Comments appreciated as always, djane
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