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

To: LLCF who wrote (6756)	8/23/1999 10:49:00 PM
From: John Stichnoth	Read Replies (2) \| Respond to of 29987

David, Allow me to offer what I have picked up from more learned individuals on this thread: Target users: Vertical industries (oil rigs, timber) where cellular is not available but quality communication is needed. On-shore boaters (but not trans-oceanic, and in competition with other existing technologies). Rural residents for whom no cellular is available. Suburban residents for whom cellular coverage is still "swiss-cheese" incomplete. In third-world countries, fixed phones to provide phone service in villages where it has never been available before. (Urban professionals with too much money and not very much sense are not an initial target since the initial scarcity of handsets puts a premium on minutes of use per terminal). Handset size makes it uncompetitive with regular cellular, as does cost--provided that cellular coverage is reliably available. If cellular is available, the dual mode phone will search out the cellular first. So, management is not expecting minutes if cellular is available. G* gets money for minutes. Period. The service providers have apparently committed to a certain minimum minutes, but I have not seen any disclosure as to how this is structured. (Is it minimum minutes per handset sold? I don't know). It is up to the individual service providers to decide on a payment plan with their customers. Lots of users with little minutes would not be good, but the emphasis on sales is apparently going to be on high-use markets (see above). So, this is being addressed. My own guess--but it's only my guess--is that the SP's plans will mirror their existing plans, eg., unlimited minutes for $129, or something like that. And they will swallow the cost of G's 40 cents per minute within the $129 (or whatever). Data will be slow on this generation of satellite. Although not as slow as irid's. As with voice, G does not expect to compete with the cellular system, if data capability is available via cellular. On the first generation, data is an afterthought and last resort. But, the aim is to get to the next generation, in 5-7 years, which would have significantly enhanced capabilities and generate lots more money than the first generation. (Most on this thread seem not to agree with me on this, feeling that the promise of the first generation is promise enough. I would note that our positions are not all that different. The first generation has to be successful to provide funds for the second generation. I just don't need a home-run immediately.) Irid may just go away. My own (very rough) calculation suggests they might need something like 100,000 customers to reach EBITDA breakeven. If they can't get there, then they'll need continued contributions from MOT and the bond-holders. Business Week, for one, just ran an editorial suggesting that MOT cut its losses and stop the service. Irid would appear to have a cost advantage if they did not have to cover debt or depreciation. But, theirs in an inherently more costly system, and the difference doesn't seem to be that high--particularly since G* has something like 5 to 10 times as much capacity. (A price war would have some benefit, perhaps, in establishing market acceptance and allowing G* to fill its available capacity more quickly). Hope that helps. Clarification/corrections, etc. from others welcomed. Best, JS