Another point of view from the CC replay. Seems like a lot of 'good' news to me, but then again I'm just a Rah Rah type. One question though, how come I did not hear about this until after the fact? Who dropped the ball? Does RS have to do all the work around here? (ggg)
Jeff Vayda
From a SI Lurker
I listened to the latest cc last night. It actually had some viable information for once, although for the first time BS admitted that the SPs and G* have different agendas. But, another guy there (I think the Pres. of G*)
reiterated many times that the SPs are an asset, not a liability, and that they all have money (equity, GWs, etc.) and time invested and that the people in charge of G* on the SP level are accountable for ROI for the SP.
I have about a dozen sticky notepads here filled with notes. Some highlights:
1) Loral taking a $47 million writeoff on Chinasat 8, although BS claims he's still confident that they can get the license approved. Imo, state dept. payback for Chinagate, regardless of the lack of any proof of Loral wrongdoing. To me, it looks like a case of getting all the bad news into 99 and hoping 00 is a big year. Even with the writeoff, Loral will hit its numbers for the year.
2) FSS is "on track." He went through each sat's %s and it seemed to be improving from last cc. Satmex 5 up to 70%.
3) SSL won two Intelsat contracts, as well as a canada sat and a k-star sat; SSL margins are at 9%, as promised.
4) last 4 G* birds will be on-line by year end. no problem with any in orbit sats. (pretty impressive)
5) BS really trashed Iridium, saying it can't be salvaged in his opinion; did say that its spectrum was worth something, but that the spectrum had to be used for voice; made a joke, in response to a question, by saying that G* was interested in buying I* but that I* wouldn't accept what G* thought I* was worth, which was $0.
6) Thought that ICO could go forward with McCaw and be viable, but that G* always expected competition from up to 4 companies so that 1 competitor isn't a big deal.
7) Broadband: BS acknowledged that they may have taken a bit too long to get their BB plans together, but they expect to have a detailed plan out by end of 1Q00 (which means 3/31/00 + 45 days in my book). Still had the same basic bb
plans by first leasing space on existing sats then dedicated sats. service initiation by 1st half of 01 (again, in my book that means late 2nd half of 01).
8) now some real G* news (RS reported most of this):
a) system working very well, 90% call completion and 95% call retention
b) 400 friendly users in US, license should be approved in 1 - 3 weeks, purely red tape at this point
c) 9,000 currently phones in the Cellstar distribution channel
d) Canada service starts on 12/15 with "discounted commercial service" -- not sure what that meant
e) Brazil expects to have 1,500 phones sold by 12/31/99 with limited billing starting in December; Brazil has been "very responsive" to the phones
f) S. Africa has a license delay, but purely red tape at this point and will begin service in Feb (1 month late)
g) Italy - seems to be the first place where G* is actually targeting users in a concentrated effort (seems like an odd locale to start (bigger fish out there), but we'll take what we can get).
Results seem very encouraging; Telit has 3,500 phones; 700 phones contracts signed; 2,000 additional phones ordered
for 12/31 delivery; 2,000 verticle industry users expected by 12/31; orders for 400 marine kits in place with installation expected in 1Q00
h) Slovak Republic - 150 phones in use and (it seemed) an additional 150 being tested by the military
i) France 125 phones in place with 25 corporate accounts in vertical markets; Radiocomm 2000, which is owned by France Telecom Mobile, is looking to switch over its 10,000 radio users to G*, 1,000 phones already ordered with the rest
seemingly a done deal
j) Argentina & Peru - commence service on Jan. 15 for Arg.; billing in Feb.
k) nothing re: China, except that BS said that G*'s only prodder that they have with the SPs is that G* can revoke the exclusive license if the SPs don't meet certain minimums and BS said that this was used in China and Brazil (surprising for numerous reasons) to speed rollout
l) India SP has been chosen, but can't say who, India up over the "next several months"
ml) 45,000 - 50,000 phones out by 12/31/99 with 40,000 per month afterwards.
The manufacturers are unable, even if demand warrants, to increase capacity until around June, at which point they can go to 80,000 per month; BS sees this capacity problem as to why the SPs aren't placing large orders because the SPs
don't want to pay for the phones until the manufacturers are able to ramp up; BS sees the initial 300,000 order lasting until May or June, at which point he sees a surge in phone production / orders; 650,000 phones delivered by 12/31
n) prior sentence was exclusive of fixed phones, which wasn't discussed surprisingly
o) BS still doesn't see demand for the phones as an issue, BUT, for the first time (for me at least) he said that the only issue is whether users would hit the 160 minutes of use per month -- obviously this is huge, one would think
that G* has some sort of feel for how much G* was used in the softrollout
p) G* will report minutes of use quarterly, but will give reports throughout the quarter as well
q) G* will look to stimulate sales with incentives to the SPs on an as needed basis, but they don't want to throw money around unnecessarily to the SPs because they feel demand is there, but G* will step in if needed (wouldn't
specify what types of incentives) |
