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To: Valueman who wrote (2353)	3/27/1998 3:48:00 AM
From: brh187	Read Replies (1) \| Respond to of 10852

pls break down the referenced 1.5 billion min/yr usage on the I* system. would like to know the components of the calculation. thanks bernie(no rel)

To: Valueman who wrote (2353)	3/27/1998 12:55:00 PM
From: Dragonfly	Read Replies (1) \| Respond to of 10852

I never said Iridium's pricing would be low out of the gate. I think there is so much demand for this system that they will not have to lower prices. Secondly, if/when sats fail, there's nothing to stop them from replacing them out of current revenues. Iridium is not a one off deal, and remember a lot of the 4.5 billion you're talking about is non-recurring costs. Operationally, they could be quite profitable at $1.33 a minute. If you change your numbers to include $3 a minute for the first 3 years (at half capacity) and $1.50 a minute for the next 8 years on a total investment of $6 Billion you have 24.5B return on a 6B investment-- and that's the first 11 years, the next 10, figure the price of replacement sats is much lower and it costs $2B and you get a return of $11.25B on your $2B investment at a per minute cost of $0.75. Another factor to consider here is coverage area. Now that I've found out that Globalstar isn't really global, how much isn't covered? We've already got parts of norhtern canada, the north sea, the south sea, both poles. How about the middle of the ocean? Readware said once that "of course Iridium gets the maritime traffic"... ok, then since both systems will be using Cellular when you're in range of a cellular service provider, they are going to be competing for business of people who need service when they aren't near a cellular system. Since the ocean makes up 3/4 of the total surface area to begin with, when you take out the land mass covered by cellular, it seems there's a lot of the world where you won't be able to get Globalstar service unless they start putting more groundstations out there. I cannot find a description of what areas will and won't be covered in any of the info they have sent me. Personally, I hate the thought of paying $3 a minute, but for my needs (sailing around the world) Iridium is the only option. I think there are a lot of companies that work internationally that will have the same limitation. Even if your business is land based, your people will often be over water or maybe even in a region where there isn't a globalstar gateway nearby. (How many gateways are there? I remember hearing 30 originally, but that its much fewer now...)

To: Valueman who wrote (2353)	4/2/1998 1:06:00 PM
From: dougjn	Read Replies (3) \| Respond to of 10852

Yes, and in fact it prob. wouldn't pay the indenture interest. Almost certainly wouldn't. Which is why I think Iridf is such a vastly riskier investment than is G* /Lor. The only places were I* MIGHT get competitive is in places where, for regulatory/subsidy reasons only, long distance prices are very, very high. The actual cost of completing a G* long distance leg of a call will be among the lowest long distance costs anywhere. Each gateway is a concentrated hub of telephony, which can efficiently squirt out long distance to the world wide network. Long distance costs are coming down all over the world. All a Gateway has to do is get a rational pricing decision from a country on G's distinct and very low cost flavor of long distance to be able to blow I away on costs everywhere. Everywhere. And remember everywhere regional phone companies are getting a piece under the Globalstar wholesaling system. Moreover, any country that chooses to can prohibit I's targeted world business travelers from bringing in their phones. Or more likely, can decide to collect huge usage tariffs. Sure, some criminals will be able to evade such, but is that I's prime target market? This is a real issue. Faced recently in Africa by news orgs. trying to bring in Inmarsat phones to call in from the field during the Congo crisis for example. G, from what I've been able to tell, has had a lot more success in signing up lots of foreign countries. I wish I knew more about each company's success here. I think both are sort of keeping this issue a bit quiet at the moment. My guess. G's model is inherently better on this issue, however. Unlike I, G doesn't cut out the locals. It cuts in the locals. Actually regionals, but every country in the world (more or less) has been offered the chance to build a gateway. Lots of regional agreements have in fact developed among offered countries who don't want to start out financing their own gateway, but will instead use a neighboring one. This is the main reason why the expected number of Globalstar gateways has declined from an initially projected 200 or so. That many were never needed technically. Nothing like. It was political. I wonder how I* is really doing here. I think its a real issue. Esp. once G* is up and running and pumping some $'s into its local partners. Wasn't there some question as to whether I* was gonna be allowed to operate in China? (I.e., its phones allowed in?) Maybe the result will be that I* will pay off the balking locals in some way. That would only raise their already way too high costs, however. Doug