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Technology Stocks : GX Investors Thread -- Ignore unavailable to you. Want to Upgrade?

To: DWB who wrote (259)	9/1/2001 6:18:35 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 586

<If you had the cheapest cost to create a good (say $1), and everyone was selling similar items for more (say $5), would it make sense to sell yours for $1.50 if you could sell all you had for $3? > No, but GX can't. My understanding is that they have huge capacity. So, even if competitors are charging a lot, it might make sense for GX to slash prices to get swarms of customers filling the fibre and doing things they wouldn't have previously done because the cost was too high. For example, I would use a LOT more megabytes if it was cheaper. It isn't cheaper in part because of the prices charged for fibre under the ocean. GX controls some of those prices. So, they get less money from me than they would if they cut their prices. Globalstar gets zero money from me simply because their minutes are too expensive. If it was cheaper, I'd buy a phone and link through the Dubbo gateway. I have no idea at all whether GX prices are at the right place or not, but judging from the comments I mentioned, I suspect they are using the Iridium, Globalstar and old-style telecom, "We have a great service and you should pay us a LOT" model. Global Crossing is also similar to the Globalstar model in that they can cut fibre prices all they like but the Telecom New Zealand customers of theirs are the ones who have access to the end-users, just as Vodafone sits between the GlobalstarLP constellation and the end user. If the G&G cut their prices, those prices might or might not be passed on to end users. I understand that GX actually does have direct end users [7000], and is signing up large financial institutions who use the system for their own purposes, so this is only partly true. Mqurice