Tero, it is I! Me! You'll be pleased to know that I remain in remarkably good health, happiness and new found prosperity thanks to the comprehensive defeat of the swarms of hagfish which nipped at Qualcomm as it made progress from Zero to Hero, Zygote to Zeitgeist, Zip to Zenith. [To use some zzzs and make SurferM nervous].
I always try to remain balanced rather than be a slavish adherent to any fanatical belief system [which is usually bad for one's health and an effective way of transferring your money to the priesthood]. It just appeared to you that I was some mad mullah of the CDMA adherents brethren because you were fixated on the weird world of GSM [and Nokia which has for a decade performed brilliantly in converting that GSM weirdness to useful tools and profit - even having the wit to sign with Q! in 1990 for CDMA, unlike King Hagfish itself, which thought itself dressed in beautiful raiment but was actually just covered in slime].
Self-delusion is a great risk of investment. Another is to see things as they are and think that is what is important. Well, it is if an alligator is chewing on your leg, but it is vital to remember that one is there to drain the swamp, not fight alligators. Where your self-delusion sneaked in, [I have to make a little bit of response to your wish for a cruel and unusual end to me] was to see things as they are, not as they will be.
Here we are again, trying to avoid self-delusion and make a lot of money from Globalstar. It should be at least as much as from Qualcomm [keeping in mind that Globalstar is already about 10x the low after the IPO so many gains have already been made].
What can go wrong? Marketing of Constellation1 and engineering of Constellation2.
Airtouch seems to be set on offering a complementary service to fill in terrestrial gaps and charge an exorbitant premium. They are off their trolleys. [I'd say bonkers, but that has unfortunate useage in some countries].
Airtouch will sell their terrestrial minutes for something like 10c - 20c a minute. Out of that they have to pay for the capital cost of a network. They are wanting to sell Globalstar minutes for $1.50. They buy the Globalstar minutes for less than 50c, so plan on making $1 a minute profit. They have no capital cost, which is included in the 50c. Okay, they pay for a gateway, but the per minute cost of a busy gateway is near zero. The cost of a gateway in NZ is very high because there are only 4m people and 50m sheep to use it. In the North America and China there are 300m and 1bn people who might use a gateway.
So, Airtouch is being absurdly greedy, which will reduce the minutes sold and reduce their profit greatly. They should aim at balanced returns on investment. If they could attract a million Globalstar users, that would boost their terrestrial minutes sales.
By taking the high-priced route, they will gain fewer customers and other service providers who are less greedy will gain the customers. When the constellation is busy, it will be too late for Airtouch to then try to get in on the act because they will have missed out. The other service providers will have the subscribers and be able to offer Globalstar increased payments to maintain supply of minutes to themselves instead of Airtouch.
Airtouch is taking a stupid approach. I know we are supposed to think that they are the whiz bang geniuses of marketing cellular minutes, but until very recently, the main skill in cellular profits was getting hold of the spectrum from mates in government and then operating a duopoly, which is a pretty easy way to make a lot of money in a booming market.
Airtouch is showing signs of not 'getting it'. Craig Farrill to his credit, did say, in the 3G Internet conference, digevent.com
that they will be adopting a data throughput pricing model for 3G services rather than a per minute charge. So they are lumbering in the right direction. But slowly.
It's embarrassing that you and I are in harmony on this Tero. What will people think? To answer your question [though you never answer mine] <...why do they seem intent on copying the Iridium pricing plan?> - because they are bad marketers. Fortunately, they are in competition with other service providers for the minutes and if they can't sell them, somebody else will, in another country.
Contrary to what many people think, even including some 'experts', many of the minutes can be carried from one part of the orbit to another. So a minute not used in USA, can be carried over to Africa or China. The limit on minutes is not just circuit availability, it is photovoltaic supply, battery capacity, thermal cooling of the satellite. So even though circuits might be available, the satellite might be too hot to use them, or the photovoltaics might be not putting out enough or the battery might be flat. Similarly, if a minute could have been used over USA, but isn't, the energy which would have been used on supplying that minute can be stored in the battery and used later in the orbit when going over China where the service provider isn't so greedy.
But, to prepare my defence, it might be that Airtouch knows EXACTLY what they are doing and know that demand will be so high at $1.50 that handset supply will be the problem, so there is no need to discount the minutes. If that was the case, you'd think they would have ordered and paid for a million handsets. They haven't, so we can conclude they don't believe it themselves.
Sure, the military intelligence community of the USA can use taxpayer funds to keep Iridium in operation. But even if they do, it is not a significant threat to Globalstar because they can only supply 1bn minutes while Globalstar has 10bn to sell.
ICO is a much more serious threat, which Globalstar should defeat before ICO can raise money to proceed. They can defeat ICO by right now starting the price war you mentioned. No, it was a face-slapping contest [which I gather is some weird Finnish custom]. We have the unused minutes. Let's attack!!!
Maurice |
