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

To: KyrosL who wrote (17506)	9/30/2000 9:31:22 AM
From: rhkohnen	Read Replies (1) \| Respond to of 29987

KyrosL What is the real cost to operate G* and still have a business. The satellites are solar powered and there is no maintenance that can be performed on them short of putting up replacement. Replacements are not needed for another 10 years or so. The Gateways are operated by the SPs with no cost to G, just income. That leaves us with ground support, Administration, Accounting, Maintenance, Utility costs, Marketing Cost, and the cost of money. Marketing cost can be reduce to zero, because the SPs are suppose to provide marketing. Accounting is simplified to be minimal because G only invoice the SPs, it is up to the SPs to collect from the users. Administration, well BLS still has his day job.<GG> I don't know how many buildings G* actually have to determine leases and utility cost, but I can't imagine it being very much. All they have to do is monitor the satellites and record usage. IMHO I would guess all of the above can be done for less than $10 mil That leaves the cost of money, which IMHO is the real cost. If G* is paying 11% on 1 bil then we are looking at $110 mil per year. Add the above $10 mil you get $120 mil per year for G* to be a business. Now G* is operating at a much higher burn rate, but if they had to such in, they could operate at a much lower cost. G* just got $160 mil in added financing which if my guess is correct could hold them for over a year if they believe that the market is not there at this time. Evidently they must because they are spending aggressively. BTIW I agree, that G* problem will be in how to expand capacity. QCO is working on that.<GG> Best Regards Bob