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Technology Stocks : Nextwave Telecom Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Rono who wrote (609)	12/11/2001 4:30:48 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 1088

Rono, things change. Osama spent more than 6 years of his life trying to destroy the USA, but I believe he is undergoing a conversion now and would love to have a settlement. As you know from what he did 11 September, he really was not wanting a settlement. Things change. Allen Salmasi obviously was persuaded that it was better to settle and live to fight another day. If you think that he is just trying to get money, you are off your rocker! Irwin Jacobs, Allen Salmasi and their ilk aren't interested in scamming money, they built OmniTRACS, Globalstar and then a lot more besides. Sure, people can sneer at Globalstar, but I'd like to see what they've achieved in their lives. Globalstar failed due to incompetent marketing by service providers, not because there was anything wrong with Globalstar, which continues to perform beautifully. I think you'll find that Allen Salmasi will get the money from the new owners of the spectrum and will do something great with it, such as, I hope, get Globalstar going in the way it should have been going. Let's hope he understands that pricing stuff if that's his idea... siliconinvestor.com ============================================================ * Pricing * We know from billions of phone calls through thousands of systems that phone call minutes are very sensitive to price. Globalstar has sold 58,000 handsets and perhaps 50 MOU per month per handset at $2 a minute or $1.50 a minute or thereabouts with the average about $1.80 per minute. So, if a subscriber uses 50 minutes in a month and pays $1.50 a minute, that's $75 a month. If the price was cut to zero, they would use about 1000 minutes a month [from Leap sales figures]. Here are the figures for between those two: $2.00....xx ......................................................................................................30 MOU x $2 = $60 $1.80....xx ..............................................................................................40 MOU x $1.80 = $72 $1.60....xxx ......................................................................................50 MOU x $1.60 = $80 $1.40....xxxx .................................................................................70 MOU x $1.40 = $98 $1.20....xxxxx .......................................................................... 90 MOU x $1.20 = $108 $1.00....xxxxxxx ................................................................... 120 MOU x $1 = $120 $0.80....xxxxxxxxx ........................................................ 150 MOU x $0.80 = $120 $0.60....xxxxxxxxxxxxxx .......................................... 220 MOU x $0.60 = $130 $0.40....xxxxxxxxxxxxxxxxxxxxxxx ...................... 350 MOU x $0.40 = $140 $0.20....xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx ............. 550 MOU x $0.20 = $110 $0.10....xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx ..800 MOU x $0.10 = $80 $0.00....xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Flat Fee = $120 Minutes 0.....100.....200.....300.....400.....500.....600.....700.....800.....900.....1000 That's a rough guess to fill in the graph between the points we more or less know. So somewhere around 40c a minute to 60c a minute will maximize income. But to generate a full system, customers have to get a bargain, so it's far better to err on the cheap side than expensive [as both Iridium and Globalstar found out at the cost of $30 billion in market capitalisation and something like $10bn in investment down the drain]. By erring on the cheap side, there is no loss of revenue [the lower minute price is made up with increased minute sales and since the marginal cost of a minute in the existing constellation is zero, that's no loss to Globalstar]. But there is a big gain in subscribers lining up to buy and a much reduced time to reaching a full constellation. So, to be on the safe side and maximize profit in the shortest time, it's obvious that a price per minute of between 15c per minute and 50c per minute will maximize revenue. Since it would be far easier to sell service with 15c a minute than 50c a minute, I think that 15c a minute would be far better financially than 50c a minute because the constellation would fill probably 4 years sooner than at 50c a minute. Then, when the constellation is full, a much, much, much more interesting thing happens. To avoid busy signals, we will have to put the price up. With luck, we would have to put the price up to $1 a minute to hold demand at manageable levels. We would scramble to get the next constellation launched at which time we would be able to treble our income and offer more advanced services with total global coverage. That estimated price versus MOU graph is based on the wealthy USA market. In poorer places, that graph will be lowered according to the average "hourly rate". So you can see Kyros, that by lowering the price, we get much more revenue and we get it a lot sooner. Which would enable us to raise prices to slow demand to achieve equilibrium much sooner. Which would mean we'd get the next constellation up a lot sooner. So, we should have a retail price of 15c a minute for mobile phones and 10c a minute for fixed phones. Then we'd really get some excitement going and start bringing in big piles of money from subscribers who would be relaxed about yakking away to their heart's content. The stockpile of phones would suddenly be in big demand and we could sell them for a big profit instead of the pathetic ebay price of $450 or so. search.ebay.com. QUALCOMM would get excited and start their production lines up in a big way. They'd put all those engineers back on Globalstar. At 15c a minute, we'd undercut terrestrial roaming heavily. There is a lot of competition getting in trouble when we cut our price below 40c a minute and at 15c a minute, they are doomed [which is a slight exaggeration because not everyone will want the big handset, poor battery life and link budget problems even if it's cheap].

To: Rono who wrote (609)	12/12/2001 11:05:14 AM
From: Eric L	Read Replies (1) \| Respond to of 1088

Sen. Hollings explains opposition to 'scam' in letter to Congress >> Nextwave Spectrum Settlement In Jeopardy Donny Jackson TelephonyOnline Dec 11 2001 Powerful Sen. Ernest Hollings, D-S.C., recently sent a letter to Congressional colleagues opposing the proposed NextWave Telecom settlement, calling the deal that would deliver valuable spectrum to wireless carriers and $5 billion to the bankrupt firm a "scam" that could set a damaging precedent in telecom law. Opposition from Hollings will make it difficult for Congress to pass the spectrum settlement by the Dec. 31 deadline attached to the deal, because the bill likely would have to get through the Senate Commerce committee chaired by Hollings, who cited several reasons for opposing the proposal. For instance, Hollings notes the proposed settlement was not approved by the FCC--the governing body responsible for overseeing the distribution of spectrum—although the Attorney General indicated the commission agreed to it. Instead, the deal between NextWave and large wireless operators such as Verizon Wireless was "engineered" by FCC Chairman Michael Powell. "This private, back-room settlement is fundamentally at odds with telecommunications law and has been presented to us at the 11th hour," Hollings’ letter states. "The unmitigated gall of the proponents of this deal is appalling." Under the deal, the government would receive $10 billion of the more than $15 billion wireless carriers bid in the January reauction. The spectrum was auctioned after the FCC reclaimed the licenses when NextWave failed to pay for them. Proponents of the settlement note the government could use the $10 billion and that the wireless carriers need the now-unused spectrum. "They don't focus on the fact that Congress is being asked to reward a group of speculators who put 10 percent down ($500 million), litigated, lobbied, and lawyered for five years, and are now on the cusp of a $5 billion payment," Hollings’ letter states. "Now you know why Congress is being told that it has to act by Dec. 31 or all is lost. The lobbyists don’t want this scam exposed." The settlement was forged in the wake of a U.S. appeals court ruling that the FCC acted improperly in reclaiming the licenses from NextWave, which argued the spectrum was an asset that should have been protected under bankruptcy law. The unusual circumstances of the case have caused the wireless carriers to seek Congressional approval of the settlement to insulate the spectrum from future litigation. Hollings believes Congress should not legislate the individual settlement but should consider enacting a law that clarifies that the FCC’s oversight of airwaves takes priority over bankruptcy claims. "Enactment of such a bill would give the government more than $15 billion that was bid in last year's reauction," the letter states. "More importantly, fundamental communications law and policy would be upheld and affirmed, rather than repealed." Meanwhile, Hollings called for hearings to be conducted next year "to examine thoroughly and fairly the claims of all involved in this dispute." << - Eric -