Globalstar Telecommunications Limited GSAT Message Board

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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 62.25

+6.2%

Dec 19 9:30 AM EST

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To: Jeff Vayda who wrote (4451)	5/5/1999 2:09:00 AM
From: Maurice Winn	Read Replies (1) of 29987

Jeff, //I am sure there is a good reason (money) for G* to be the upfront buyer of the initial set of phones// Here is the reason. Globalstar has got to get the handset makers going. Since the service providers were messing around, Globalstar places orders and thus ensures there are handsets available at startup. Globalstar can then sell those handsets to the service providers. Now here is the cunning trick by Globalstar. They can buy the handsets, then cut the price of the minutes, which would induce a mad scramble for handsets, which Globalstar can then sell to the highest bidding service provider, thereby making a big profit on the handsets. Globalstar should now order 4 million handsets, thereby ensuring that Globalstar gets the profits of high value handsets rather than the service providers or Qualcomm, Ericy or Telital. The service providers will be competing for handsets and minutes. The slow ones will end up with a low market share and less profit when the minute prices start rising. The New Zealand service providers [potential ones only since Hyundai packed it in] are sitting on their hands. They are going to miss out on a great opportunity. I got the AirTouch blurb for North America and they are indeed hoping to sell the service for between $1.50 and $2 retail. As Andmoreagain says the question should be "Are they mad?" Not to worry, reality will intercede and the overpriced or customer insensitive service providers will miss out on the opportunity. Maybe China will be the big Globalstar consumer by selling the minutes at a low price. Phone boxes in China might be the big seller as Oliver said ages ago! Maurice

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