More details on 4/22/99 CC (via G* yahoo thread)
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Thanks for the Conf Call #..
by: AR2BW (50/M/Orlando, FL)
13785 of 13793
Also to Valueman on SI for the reference. I listened last night and the up-to-date information hardens my
resolve to see this investment out.
Most of the conversation in the call, hosted by Mark Grossman from JP Morgan, revolved around the service
rollout this summer and the phones. See the following link for the phones:
globalstar.com
Check out the car kit option.
BS made his usual upbeat statements but updated the projected world market to 40M potential subscribers
from the previous 30M. His statement is that the market cannot be fully served by the 5 potential systems due
to spectrum limits so competitive pressures to lower prices will not come about for MSS in the near future.
Everyone will be able to service all the subcribers they can stand if their prices are right. He sees no problem
reaching the 7.5 million projected for G*1 during its life.
He stated that G* only needed 14% of its business plan to breakeven (I guess that is the 1M subscribers
mentioned in previous conference calls)
The real news here during this call was the statements by three reps from the main service providers: Mike
Cur(?) Airtouch (North American), John B Alagard (?) Dir Gen of TESAM (a joint venture with France
Telcom, Alcatel and Alenia covering France, South Amercia, Turkey), and (Louigie?) of ELSACOM
(Europe, Russia).
Airtouch is setting up a central distributor, (Cellstar in Dallas, Tx), who will provide full service for sales, setup
and repair for North Amercia (including canada/mexico) using the trimode Qualcom phone. They are setting
up North America as a seamless network (SMSA) with 5 gateways and are looking at a one rate plan. I
particularly like their statement "if a customer calls and orders a phone he will have a working one in hand the
next day." They indicated that they will start shipping in August. They expect that about 1-2% of their current
65 Million cell phone subscribers will adopt G* over time (650,000-1,300,000!). They indicated that market
penetration looks like in might go as higher in some remote areas in Canada.
Tesam has 6 gateways and covers 31 countries. (1 in france, 4 in South America, 1 Turkey). Their market
evaluation indicates that 90% of the calls will be in country with 5-8% to neighboring countries. Only a small
% will be international which is why the roaming traveler, while covered, is not a target G* market. They have
60,000 of the 300,000 phones (dual mode Ericson and Telital) on order and will only roll out service to each
market when phones are in the distribution channels. They expect that about 1-2% of their current 6-7 Million
cell phone subscribers will adopt G* over time (60,000-120,000!).
ELSACOM has 2 gateways and covers 24 countries in Europe. (1 in Italy, 1 under construction in Finland).
ELSACOM has 25,000 of the 300,000 phones and expects to rollout in Sept/Oct as phones hit the
distributors. Their subproviders in country are already starting to make additional orders for phones
(GSM/G* dual modes) due to their market projections. They indicated that market penetration looks like 1%
of their existing base also but might go as high as 10% in some remote areas in Ukraine and elsewhere. In
many of their service areas G* represents a completely new service so there is no existing base.
All of the providers have ad budgets targeted for the fall (a big christmas season!) with $40M from G* to set
a world brand tone starting in the July time frame. BS is targeting the Geneva Telecom conference in October
for a big splash.
All in all, my investment looks pretty good in light of this information. That is about it. I might have missed
something in 4 pages of notes.
AR2BW
Posted: 04/24/99, 1:39PM EDT as a reply to: Msg 13783 by halpcar2
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