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

To: Jim Parkinson who wrote (25240)	9/18/2002 2:02:17 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 29987

Hi Jim. It was dumb Vodafone and GlobalstarUSA who should have lowered prices first, not the handset makers. The very, very simple reason is that minutes were in huge oversupply and handsets were in short supply. Minutes had to be cheap to fill the system. When the system was full, GlobalstarUSA and the service providers would make their profits. They greedily and stupidly tried to charge too much and make a profit from day one. QUALCOMM, Telit and Ericsson quite rightly charged heaps for their handsets in the initial stages, when production lines were gearing up and capacity was limited. When there were millions of handsets on the system, then handset prices would have dropped to match competition and minute prices would have been rising, to reduce demand for minutes to avoid overloading. So simple! But did the marketing gurus get it? Noooooo..... They have been to pricing school and KNOW that you can't raise prices when they have fallen. They are so ignorant that they probably STILL think that's true. Unbelievably hopeless!! They also think pricing should match competition, rather than meet the target market's hourly rate [which is essential to really stimulate volume consumption instead of emergency only use]. But I'm sure they did something right. Mqurice PS: General principle for capital intensive projects with zero marginal cost of supplying another unit of service = the price that can be charged is determined by customers, not the cost of the system. If demand is bigger than expected then profits will be huge, because prices can be higher than expected. If demand is less than expected, then the money is largely lost and charging the price 'required' to make a profit won't improve profits, it'll reduce them even more. The general principle is to charge very low prices to generate a rapid filling of the capacity which has been built, then increase prices to balance capacity availability and demand. Maybe that's a new principle that Business Schools haven't heard of and I could patent it.

To: Jim Parkinson who wrote (25240)	9/18/2002 10:40:54 PM
From: waitwatchwander	Read Replies (1) \| Respond to of 29987

Motorola Money Transfer Restrained By Mumbai Judge financialexpress.com Iridium case haunts telecom giant Sucheta Dalal Mumbai, September 18: US telecom giant Motorola’s Indian operations received a major set back on Tuesday when Justice F I Rebello of the Mumbai High Court passed an ex-parte ad-interim order restraining it from remitting or transferring any money out of India until a case filed against it by Iridium India Telecom Ltd is finally decided. The learned judge has directed all “parties/ authorities” to act on this interim order. Justice Rebello’s order was in connection with a Suit (2961 of 2002) filed by Iridium India Telecom versus Motorola Inc with BPL Mobile as a respondent. Iridium India is a consortium of nine of India’s most powerful financial institutions including Industrial Development Bank of India, State Bank of India, ICICI, Housing Development Finance Corporation, Life Insurance Corporation, Unit Trust of India, General Insurance Corporation and its subsidiaries, Infrastruc-ture Leasing and Financial Services and Export Import Bank of India. The order comes as a big break for these institutions, which have written off a large sum of money because of their Iridium mis-adventure. They had together invested $70 million for a five per cent stake in the Iridium LLC and a further Rs 126.09 crore in the Iridium gateway at Pune. This was India’s largest foreign investment. Videsh Sanchar Nigam had also invested Rs 50 crore in the gateway. Iridium LLC itself was an ambitious global satellite communication project promoted by Motorola Inc., which envisaged a constellation of 66 artificial satellites girdling the globe to provide seamless communication anywhere on earth through a single telephone number. Unfortunately, it didn’t work quite that way. The Iridium phone, when it was finally launched, was not the dream that was sold to the world but an embarrassing shoebox-sized instrument, which did not receive signals in any closed building and was far too expensive to find ready buyers. The project failed. Iridium LLC went bankrupt and the Indian institutions, like many of Iridium’s promoters around the world, accused Motorola of fraud and inducement to invest through false claims and suppression of material facts. They have also alleged that although the project went bankrupt, Motorola emerged as the sole beneficiary. It has already pocketed a hefty $6.5 billion (approximately Rs 19,500 crore) from Iridium LLC for equipment supply and other services “at artificially high prices”, while its own investment was a mere $315 million. The $5-billion project, was sold to the Collusy Group in March 2001 for a paltry $25 million and is now operating fairly well through a single gateway and continues to benefit from satellites and assets which were part of the bankrupt project’s future plans. The institutions, through Iridium India, then filed a criminal complaint against Motorola at Pune. Motorola had then questioned the jurisdiction of the Indian courts in trying this matter. The present suit filed by the Indian institutions in the Mumbai High Court follows the Motorola action. In this suit too, Mr K Parasaran who appeared for Iridium India had argued that the project was merely a corporate facade “from behind and through which” Motorola Inc operated and acted. And that they subsequently discovered that ‘material representations’ made by Motorola were “totally false and/or dishonest and/or fraudulent and/or deceitful and/or misrepresentation and/or negligent misstatements”. They have also alleged that the Iridium project was merely a research and development tool to develop and promote Motorola’s expertise in building satellite systems, which it would then use or market for its benefit. It has supported its case with a copy of its complaint before the US Bankruptcy Court, Southern District of New York. Justice Rebello has said in his order: “The plaintiffs have made out a prima facie case which will warrant protecting the interest of the plaintiff until further orders” and has issued ad-interim relief as prayed for by Iridium India. Given the global revelations of fraud and accounting fudges by US companies, the Indian trail will attract a global interest in its outcome. The institutions had pleaded that pending the final disposal of the suit, Motorola be restrained through a court injunction from removing from India, assigning, transferring, discounting, securitising, or otherwise encumbering any assets or properties in India and amounts payable or receivable by Motorola from any entity. They have specifically asked that this should include a sum of $120 million and Rs 377 crore that is receivable by Motorola from BPL Mobile Cellular, under consent terms that BPL had filed with Motorola earlier this year. The institutions have asked that Motorola should pay them $250 million for losses and punitive damages. Motorola also has a small counter-claim of $ 6.9 million against Iridium India Telecom. Justice Rebello’s order is bound to be a big blow for Motorola’s large business interests in India. Its telecom equipment sales in India were $115 million last year; also, over forty per cent of GSM subscribers in India operate on Motorola cellular networks. It also signed a $70 million contract with Bharti Telecom last year. When FE had reported the earlier criminal complaint, Motorola had maintained, “the legal complaint filed by the former Iridium gateway company is without merit and is wholly disingenuous in its claims”. Scott Wyman, Motorola’s spokesperson had then told FE “the people (read institutions) who invested in Iridium LLC were very sophisticated investors” who “knew full well they were investing in a new, bold innovative technology and space communications program”. This time, when contacted Motorola’s chief of Indian operations Mr Pramod Saxena told FE that he was unaware of the order and would only be able to respond when he had seen it