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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT -- Ignore unavailable to you. Want to Upgrade?


To: Rajala who wrote (5199)6/15/1999 4:16:00 PM
From: Clarksterh  Respond to of 29987
 
Rajala - Nobody in Europe is buying it for starters. Why should they? GSM works and roams practically everywhere in seconds after you step off the aeroplane. It offers unsurpassed quality, incredible selection of handsets and features, long stand-by times, and very competitive pricing.

Great, I agree. And I suspect that few will be bought in Japan either with their high population density and high build out of cell phones. But methinks you are being overly Eurocentric. There are many parts of the globe which are not built out to as great an extent - the US, Brazil, China, New Zealand, Australia, ... . Is it more economically reasonable to put a $150k base station every 1600 square miles and serve 10 calls a day, or is it more reasonable to install a $15M satellite cum gateway to serve 12M square miles.

Just a story which I have given to you before:

In Brazil phones are very hard to come by. They cost several thousand dollars to install, and then the rates are very high realtive to annual income. But, nonetheless, many people team together to install a party line, and then charge their neighbors who want to use the phone. They don't talk long because it is expensive, but they do talk regularly because they want to talk to family members who have moved to the city or to another city.

I think it is completely reasonable to assume that every town of more than 1000 people in China will make good use of a G* booth, especially since there is a large scale migration to the cities happening as they industrialize. For instance, lets assume that 1/10th of the Chinese population lives in towns with a population between 1000 and 10000 and each family of four makes one call of two minutes per month. (These are educated guesses. Anyone know what the real rural population of China is?) At wholesale rates of $0.7 per minute that is $40M per month from the poorest people of China.

Clark



To: Rajala who wrote (5199)6/16/1999 12:31:00 AM
From: Drew Williams  Read Replies (2) | Respond to of 29987
 
Rajala, I'm just not sure where you are coming from (both figuratively and literally).

It seems to me, though, that you exhibit "addytood" as we call it in Philadelphia, rather than making a coherent, educated argument.

There are a few things that seem obvious to me that perhaps are not so obvious to you. Here's a short list.

1. Cost structure "A". For large portions of the world, it has never been economically viable to install wired telephone service. Similarly, in thinly populated and travelled areas, the phone companies will not install cellular towers. Even in the United States, especially since telephone service was deregulated, this is so, and getting more so. There are just too many other more productive things to do with money. I suspect this is true elsewhere, but with government owned telephonopolies it may not be.

2. Cost structure "B". GlobalStar's cost structure is such that they can afford to undercut any other satellite telephony scheme with similar performance (latency and audio quality) that is currently operational or likely to be any time soon. All things being equal (and, thank goodness, they rarely are, because the products I sell are far from the least expensive) most people are likely to buy the less expensive product.

3. Phone size. The portable analog phone I bought twelve years ago was about the size of an unabridged dictionary. After a while, I hard-wired mine into my car (and then another car and then another). This phone was considerably larger than the available Iridium phone and both larger and more expensive than all three GlobalStar phones. As they say, size matters; but, as Maria Muldaur sang a long time ago in a quite different context, "It ain't the meat, it's the motion." In other words, if you are traveling where there is no cellular service, that fancy 2 gram phone with 3 year battery life is just so much dead parrot, even if it also plays solitaire and pac-man.

4. Location, location, and location. See #3

5. Cultural bias. I got it. You got it. All God's children got it. We just have different flavors. I like the idea of being able to make a call from anywhere to anywhere.

6. It is not "either/or." It is "and." All GlobalStar phones are multi-mode phones. GlobalStar phones all come with built-in GSM or CDMA. The phones' default mode is cellular. So, if you are standing in the middle of Picadilly Circus, you don't have to worry about where the satellites are. But, if you are boating on Lake Windermere, you also don't have to worry about where the cellular towers are.

7. Together, people can afford things they may not be able to afford individually. People can share things. When I was very young, many of our neighbors had a "party line" phone, which meant they shared a single phone line. Now, between our home and offices, my wife and I are by ourselves responsible for the existence of eleven telephone lines, including five voice numbers, two fax numbers, two pagers, and two cellular phones. (Believe it or not, I have actually memorized all the numbers!) In much of the world, not only is this not economical, it is not possible at any price. A GlobalStar phone booth in the middle of a rural town in Africa, China, or India (to pick just three) brings them a whole lot closer to their friends and relatives who emigrated to somewhere in the wired world.

I would only add that Iridium's problems do give me pause. I am shocked (really!) that they could spend all that money getting the so-called hard part done (launching the satellites) and so completely bugger up the so-called easy stuff (marketing and sales). It is a classic engineer's mistake, of course. Dilbert is not the only one who mistakenly thinks all marketing people spend their days drinking champagne and eating sandwiches made from endangered waterfowl. (Some do, of course, but not all. The rest of us just aspire to that.) Like most anything else, it is very very difficult to do marketing very very well.

I expect that GlobalStar and it's partners have learned a lot and will avoid most of the mistakes Iridium has made. Of course, GlobalStar almost certainly will make a large number brand-new, never-before-seen mistakes of their own, too.

With any luck at all, none of them will be fatal, as I am afraid Iridium's have been.