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To: Maurice Winn who wrote (37937)	8/12/1999 10:21:00 AM
From: djane	Respond to of 152472

Profile: Globalstar's roaming ambassador [Jacobs] (via Mika) 01 August 1999 Martyn Warwick talks to Irwin Jacobs, chairman and chief executive of Qualcomm, about why Globalstar will win where Iridium seems to have lost. Irwin Jacobs is one of the founders of Qualcomm Inc., a Fortune 500 company, headquartered in San Diego, California. Qualcomm began operations back in the summer of 1985, pioneered CDMA digital wireless technology and has major business interests in integrated CDMA chipsets and system software, CDMA handsets and equipment, technology licensing, and satellite-based systems, including OmniTRACS and significant portions of the Globalstar global mobile satcomms system. Dr. Jacobs, who has spent his working life in the telecommunications industry, holds degrees from Cornell University and the prestigious Massachusetts Institute of Technology. I met him in London. Q: What effects do you think the Iridium debacle might have on Qualcomm's involvement in the Globalstar project? A: Iridium has been unfortunate. It has been overtaken by events and is paying the price. I think one of the main difficulties has been that the company seemed not to take any proper account of the massive growth that has taken place in the terrestrial cellular markets worldwide since it announced its LEO (low earth orbit) concept. I have studied the Iridium business plan in great detail and I must say that I have never been comfortable with it. Basically, the plan didn't change with the times and the great surprise for me was that the service went into operation without Iridium being able to guarantee the quality of service that the market had been led to expect. Iridium missed the launch date that it set for itself, the service got going late and the on-board switching caused problems. The result was that a disproportionate number of subscribers, given the number who actually signed up for service, complained about poor voice quality and dropped calls. Furthermore, airtime charges were very high and the company had difficulty in getting its very expensive handsets out to the market. Iridium has made improvements and cut charges but there is no doubt that it has been badly hurt; and that is bound to have some effect on other mobile satellite systems like Globalstar. So,what do I expect? I expect that Iridium's troubles will make it harder for other entrants to gain market acceptance and it will be more of a challenge to convince people that global mobile satellite-based comms systems are genuinely viable and can provide tangible benefits. Basically, it'll make it a tougher sell. But, that said, we're up to it, Globalstar is a great proposition, and we are not going to be deterred from the path we have chosen. Q: So, what will you do differently to make sure that Globalstar is the success you claim it will be? A: There are so many things - technical, marketing, sales, availability of handsets and services, handset size and weight, the cost of handsets and airtime - in fact, it's hard to know where to begin. For starters, Globalstar handsets are less expensive - even now they come in at under US$1,000 (Eur 980) and will get significantly cheaper in due course. And they're a good deal smaller and lighter than Iridium's - not as small as a cellular maybe, but still small - and the voice quality is exceptional; it's similar to a good CDMA cellular system. We can be financially successful and still charge significantly less for airtime than Iridium is proposing, even with its restructured tariff, and I'm sure that market forces will continue to drive subscriber airtime costs further and further down. Also, Globalstar is a bent pipe system which requires less complex satellites that also have a lot longer lifespan than those in the Iridium constellation. There's a lot less on-board processing and no on-board switching. That makes life a whole lot easier. One other thing I can tell you for sure is that we won't waste money by blanketing the world with expensive advertising campaigns that are not totally directed at our target subscriber communities. Q: How many subscribers will Globalstar need to be considered a viable, commercial proposition and, realistically, how long do you think it will take to get them signed-up for service? A: We will need about 1 million subscribers worldwide to break even and the Globalstar system can accommodate 6 million subscribers altogether. [Interesting. Different numbers than used by other G* management.] Initially, we will focus on different vertical groups and markets of potential subscribers. As for how long it will take to get them signed-up, well, I'm not going to pretend we can do it overnight and we've certainly learned from the experience of others not to over-hype the market. I believe it will take some time but we will know within two or three years, maybe four at the outside - and much more quickly if things go really well. If it takes 10 years - we won't be around! Information : info@total.emap.com URL : totaltele.com ¸ EMAP Media 1999