Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Serendipity who wrote (13116)	5/27/2000 11:08:00 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 29987

If the exclusivity loss is the only weak link, we have a solid case! The cost of two biggish gateways is only about $40M. Two gateways will cover the whole USA. Or all of Australia. Or all of Europe. The gateways are fairly cheap. The cheapest would be about $10M each [depending on how many tracking dishes, how many circuits etc]. Globalstar could retail minutes direct to end-users and sell handsets on-line or pay Dell to do it for them, with delivery direct from the end of the production line, charged up, connected and ready to go! They could retail those minutes for 20c a minute, which is cheaper than cellphone minutes in most places, or offer 'all you can eat' for $100 a month. I think at those prices the market and revenue streams would be very, very large and more than enough to justify a couple of gateways! The problem we are faced with is the high-priced marketing model of Vodafone and other service providers. If Vodafone slashed their prices in response to G! direct selling, they would still not be able to compete because they'd be paying their agreed wholesale price of 40c a minute [or thereabouts] while Globalstar could give a big discount to their own retail gateway. I think Vodafone would be on the losing end of the argument. They would lose their G! profits AND their terrestrial minute sales which would be lost to G!'s direct sales team. It might even be that G! in the contract with Vodafone can buy back the gateway if the contracted terms are not met and Vodafone loses all rights. I don't know, but that would be a suitable remedy for non-performance. In that case, G! would not even need to install another gateway. Either way, Vodafone loses. They either lose very big or just big by failing to comply with their exclusivity contract, depending on what the agreement actually says. There might not be a big enough revenue stream in NZ with 4M population to justify two gateways, [actually, I think there would], but the big countries would certainly justify competing gateways. I think Vodafone will perform beyond minimum requirements. They will not lose exclusivity and G! will be a great success in the current format. Once Vodafone and co lower the minute prices to the Sweet Spot. Mqurice PS: Somebody [or several people] have said that it is unwise to start cheap then raise prices as customers will object. I suppose those people must be living in communist lala land because anyone in a market economy knows that prices go up and down depending on supply and demand. If it goes up, of course people don't like it and squawk. Think of SUV fuel prices these days. They moan and then either decide it's still worth it, or take up walking. Starting cheap is the way to quickly build demand. The best part of starting cheap is that we have free minutes to sell and it costs us nothing to start cheap - the minutes are going to waste anyway, so better to blah, blah, blah I can't believe people don't 'get it'.