Globalstar Telecommunications Limited GSAT Message Board

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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 62.88

-0.5%

Nov 14 9:30 AM EST

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To: limtex who wrote (4331)	4/30/1999 11:54:00 AM
From: Rocket Scientist	Read Replies (2) of 29987

A few thoughts on pricing... It's pretty well documented that GLP will sell minutes at less than 50 cents per minute. Gateway operators and retailers will add their costs and mark-ups. Retailer costs should be quite low since their billing and distribution systems in general already exist: marketing and servicing G* customers ought to be a small incremental expense. Their mark-up? whatever the traffic will bear (but not more). We want them to make a lot of money, so they're motivated to sell G* phones instead of building more cell towers. The costs for the gateway operators is more difficult to estimate, but, IMHO, the cost to build and operate a GW should be <10 cents per minute, assuming a GW capacity at about 2% of 10B minutes per year. If I'm right, GLP and it's marketing chain will eventually have lots of pricing flexibility as the sum of their costs (on a fully loaded system) are probably less than 30cents/minute. Of course, even in the best case the system won't be fully loaded for several years. As for the market for minutes at 1.50-2.00$. IMO, the initial market is organizations, especially large ones: corporations, government and non-government organizations have countless employees and assets outside cell phone range that are worth this tariff to keep them in touch. I wouldn't want to see G* spending much money marketing individual consumers. Regards, RS

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