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

To: djane who wrote (6721)	8/21/1999 3:51:00 AM
From: djane	Respond to of 29987

*FT. IRIDIUM: Rivals plan 'softer' launches Friday August 20 1999 By Christopher Price What lessons can Iridium's rivals learn from the company's demise? Globalstar, in which Loral, the US aerospace group, has a 45 per cent stake, has certainly taken note. It intends a "soft" launch of its service next month, rather than the glitzy and expensive attempt by Iridium to establish a global brand from scratch. The $4bn system will initially target North America, then western Europe. "A regional roll-out makes sense for us financially," the company says. In addition, Globalstar's 48 satellites will not offer full global coverage. The polar and deep mid-ocean regions will not be covered, as Globalstar regards the potential market for these areas as "extremely marginal". The company also believes that its strategic investor base is superior to Iridium's. Like Iridium, Globalstar will act as a wholesaler of airtime to cellular service partners. But all of Globalstar's service partners are equity holders in the business. "It's a big advantage," the company says. "They have a great incentive to see the service succeed." Globalstar's tariff rates are likely to be half the price of Iridium's, even after the latter's recent price cuts. An intra-US call, for example, is likely to cost $1.50 a minute on Globalstar. However, the business looks susceptible to some of the problems faced by Iridium. Handsets, for example, will retail for between $1,250 and $1,500 - and at 350g, they will be almost twice as heavy as the latest cellular models. Globalstar says they will resemble household cordless phones in size. Target markets include those people who "roam" outside cellular coverage, such as agricultural workers; other people living in more rural locations; those working in the offshore and remote industries; and the lucrative but elusive international business traveller. ICO Global Communications, which was spun out of Inmarsat, the maritime satellite company, has a similar strategy. It, too, will have a regional roll-out when it launches late next year, and its main target market is again those people who move out of, or live without, cellular coverage. Where ICO differs is on cost. It is the only satellite operator to own its own dedicated fibre-optic network. This means that when the satellite signal is beamed down to Earth, it is carried on ICO's network rather than someone else's. For this reason, ICO's prices are likely to range from 50 cents to $3 a minute. The company says it is determined to be the cheapest carrier. ICO has also specified to its handset suppliers that their products must be no bigger than and as light as current cellular models. They will retail for about $1,000. First though, ICO must solve its own funding crisis. Blaming the "Iridium factor", the company has twice failed to raise $500m from the equity markets and recently had a $600m request to strategic investors turned down. It is now seeking a lower amount. ¸ Copyright The Financial Times Limited 1999. "FT" and "Financial Times" are trademarks of The Financial Times.