Rehash of Brazil announcement, nice phone prices comment:
Jeff Vayda
September 20, 1999
Wall Street Interactive
Globalstar To Invest $180M In Brazil By
End 2000
RIO DE JANEIRO -- The U.S.-based worldwide satellite
telecommunications company Globalstar Telecommunications will invest
$180 million in Brazil by the end of next year, the company's global president
Tony Navarro said Monday.
Speaking at a press conference here ahead of the worldwide launch early
next month of the company's global mobile phone system, Navarro said
Brazil is a key market.
"Along with India, China and Russia, we see Brazil as one of the major
growing markets," Navarro said, noting that worldwide investments by the
end of next year will total around $4 billion.
Navarro said the entire system will likely be operational by the middle of next
year, and that he hopes for up to 200,000 subscribers in Brazil by the end of
2000.
The system is especially aimed at users in the agribusiness, mining, and oil
sectors, and other areas not covered by conventional fixed line or cellular
telephone networks.
Navarro, the company's global president, expressed confidence Globalstar
won't repeat the mistakes made by main competitor Iridium, which is now in
receivership.
"Iridium made several mistakes, not least of which was the price of the
handset itself," Navarro said, noting that the Globalstar aparatus currently
has an average wholesale price of between $880 and $1,250, and this after
only 300,000 units have been produced. "We expect this (price) to come
down to around $700 once manufacturers increase production lines."
Navarro added that Globalstar will charge around $1-$2 per minute on all
calls all around the world, while Iridium charged as much as $8 per minute.
Navarro also pointed out that unlike its former competitor, Globalstar will
fully complete a thorough test period, which was initiated in April last year.
"Also, Iridium felt the bulk of Iridium handsets would speak to other Iridium
handsets, but we feel the main market is home-office to mobile and
vice-versa," Navarro said, explaining that as well as users in remote
geographical areas, Globalstar will also be specifically targeting the
international business and diplomatic communities.
In addition, Navarro highlighted Globalstar's commitment to using local
infrastructure and PTT networks.
"Iridium was essentially a bypass network bypassing local infrastructure,
whereas we will bring our satellites to these (remote) areas, creating more
jobs," Navarro said.
Pedro Maissonave, president of the local subsidiary Globalstar do Brasil, said
the company had already signed two contracts with Brazilian cellular-service
providers.
"We have reached agreements with Ceterp and Sercomtel, and have several
others in advanced stages," Maissonave said, adding that further
developments could be announced within "the next few days."
Maissonave, president of the local subsidiary Globalstar do Brasil, said the
price of Globalstar handsets in Brazil will be between 2,500 and 3,000 reals
($1=BRR1.8745), which will include initial subscription fees. But he stressed
this price will likely come down as the company finds its feet in its "niche
markets".
"Globalstar will closely follow all market trends, and we'll be very
competitive," Maissonave said, adding, however, that the company isn't
interested in competing in the roaming cellular phone market.
Maissonave said Globalstar do Brasil hopes local cellular operators will form
its main distribution channel, and that it will open its first of three land-based
receiver and transmission terminals - known as 'gateways' - early next year.
Major shareholders in Globalstar include Loral Space & Communications
Ltd., a division of the Daimler-Chrysler Aerospace AG group called DASA,
and telecommunications group Qualcomm (QCOM).
The Globalstar chief said that in addition to the above groups, there are
"several other major telecommunications companies that participate and
advise on Globalstar operations."
When questioned on Globalstar's financial soundness, Navarro said the
company is "fully funded and has sufficient funds to go into service right
now."
"Funds have come from various financial markets, with the most recent
being a $400 million to $500 million transaction from Bank of America, which
shows the level of confidence in Globalstar," Navarro said.
-By Jamie McGeever (5521) 580-9394; jmcgeever@ap.org |
