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

To: Maurice Winn who wrote (26987)	5/8/2009 5:19:13 PM
From: pcstel	1 Recommendation Read Replies (1) \| Respond to of 29987

When the full capacity of something is turned on with a bang, like Globalstar and Eurotunnel, filling it to over flowing quickly is essential. The thing to remember. There is a stark contrast between a product like the Eurotunnel and Globalstar. Both projects required Billion of dollars to build and make operational. The difference is. The consumer already owned a product that enabled revenue generation on the Eurotunnel. They drove their auto, motorized cycle, truck, van, etc. up to the Toll Gate and paid the price of admission. The capacity for X amount of vehicles per hour lay in waiting. The operational expenses did not increase in a linear fashion with traffic. So filling the system to capacity was merely a function of price points and convenience. However, Globalstar is a different animal. The system was built and possessed X amount of overall capacity. But, unlike the Eurotunnel. No one owned the enabling product to create revenue generation. The pricing of this product required steep subsidies that had to be paid for by the operator.. i.e. Globlastar. Imagine if everyone that used the Eurotunnel received a $500 subsidy from the Company that built it? The economics of it wouldn't look very good. This is the beauty of the Simplex tracking business. The devices typically require little or no subsidy. This means less funding required and interest accrued at the prevailing cost of capital. The units are cheap enough that subsidies are not generally required. Adding a subscriber that requires no subsidy and may actually generate positive equipment revenues that also pays on order of $70 per minute of system capacity is a good subscriber in my book. We want lots of subscribers that pay the highest effective price per minute,with little or no subsidies. These customers also require the fewest calls to customer service generating high quality revenue, since it is generally pre-paid a year at a time. We gave them a free sample $100 router to try out. They like it, so now they start buying. It's profitable from day 1 with investment of US$100 which has already been recovered with the sale of the second router. Zenbu has DOUBLED market share in a week! So you created a $100 subsidy for your first user terminal. The customer liked it and purchased a second user terminal which sold at a price point that enabled you to recover your subsidy plus cost of capital in a short period of time. Globalstar effectively did the same thing. The Vendor Financed/Gaveaway the initial Gateways to a large degree. But, unlike with Zenbu. The Globalstar end users didn't already posses the user terminal/laptop WiFi Card to use the service. What if you had to provide each Zenbu user a $75 WiFi Card in addition to the Router you provided free of charge. Then the business model doesn't look so good. In Globalstars case. They had to largely subsidize Gateways, and all the user terminals to enable revenue generation. Moving to a model where the User Terminal is cheap enough for positive revenue recognition without a subsidy is a good place to begin. Providing a Data Modem that enables a customer to employ VOIP over Globalstar will also reduce dedicated voice user terminals. The customer can bring their own user terminal so to speak. If the voice quality is not so good sometimes. Oh! Well.. It's VOIP. That happens sometimes.. Ya' know. PCSTEL