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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT
GSAT 64.34+7.4%3:59 PM EST
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To: A.J. Mullen who wrote (4070)4/22/1999 11:23:00 PM
From: Maurice Winn  Read Replies (2) of 29987
 
Yes AJ, the marginal cost for the LEO component of the calls is near zero. If Globalstar allowed free calling, it wouldn't cost Globalstar anything. Of course interconnection to other telephone systems and delivery to distant parties would involve toll calls, but within a region, for a Globalstar handset calling a Globalstar handset, there is no cost [there would be a billing cost if they went to the trouble of mailing out, collecting etc but if they didn't bother billing, there would be no cost].

As you say, at some stage, Iridium will try to get some money back and when selling you can only sell at what the market will bear. If the market will bear 15c per minute, then bad luck for the Iridium shareholders, that's all they'll get and the investment is lost. Fortunately for Globalstar, we'll still make a good return on investment at that price.

I think that it will gradually dawn on everyone that the minutes need to be cheap [retail 50c or equal to the terrestrial pricing] to get the systems busy in a short time and maximize our return on investment.

Ground stations have very low maintenance and operating costs. A bit of airconditioning and the like.

Maurice
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