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Technology Stocks : Loral Space & Communications -- Ignore unavailable to you. Want to Upgrade?

To: JMD who wrote (1602)	12/17/1997 1:07:00 PM
From: dougjn	Respond to of 10852

Mike, one thing I think you are slightly confused about is how Gstrf is selling services. Lor does rent out transponders, but not with Gstrf. That's in the SatMex area, Skybridge, GEO's, etc. Basically, the bulk transmission business of television feeds, and the like. Gstrf sells minutes wholesale to its service partners, as you say, at the projected price of $.45-.55 a minute. Service partners (in US, Carribean islands, Airtouch) then may sell directly or may futher distribute though local providers (e.g., local cell phone cos w/local marketing presence, such as Bell Atlantic in the NYC area). The service partners are responsible for the Gateway (capital and operation, per gstrf guidelines), marketing, service bundling (e.g. phone plus G* plus local cell phone normal access), plus billing. Although I think Lor/Gstrf is providing the billing software, which is perhaps a bit behind schedule and very complex. There is enoromous flexibility in this system, and real opportunity to meet local competitive pressure/opportunities. The system would appear to be inherantly really fat for service providers initially, although they have plenty of room to shave their margins a bit if competition requires. Competition is not only from I*, but in the developed world, it as also in the form of undercutting the roaming charges of the cell phone system. (Imagine the size of the market if Airtouch priced USA out of area minutes at .75 or even .80....with roaming generally $1.00 plus, and sometimes $2.00). In home market it could have deals w/local providers that you use their CDMA system at lowest price, and in shoulder areas where cdma not yet available, Amps cellular at a middle price. Killer. Sign me up.<g> Doug