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

To: dougjn who wrote (3286)	5/21/1998 2:47:00 PM
From: Bernard Levy	Respond to of 10852

Doug: Although this is conterintuitive, the Ka-band frequencies have an advantage over Ku-band, assuming antenna terminals of same dimension. The higher path loss due to the higher frequencies is compensated by higher antenna gains for both the transmitter and receiver. The net effect is to give an advantage to the Ka band (which is, however, more susceptible to rain effects as you point out). Thus, I would say that the ''new'' Teledesic system will be quite attractive if MOT can restrain the pie in the sky vision of Bill Gates. Best regards, Bernard Levy

To: dougjn who wrote (3286)	5/21/1998 3:25:00 PM
From: Dragonfly	Respond to of 10852

I really wish Loral would beef up Cyberstar. I think teledesic has it right here- the ability to drive down the cost of a byte per second of bandwidth and global coverage are compelling. Net usage is growing by a factor of 10 times each year- that's 1,000x times in 3 years! (To quote Gilder) this is like Moore's law on steroids! The ground level buildout of the last mile is woefully inadequate. That is the need that Teledesic is trying to meet. Right now the price of delivering a T1 speed connection to a suberb of a major city is about $1,500 a month. And that is if you can get it. Outside of cities you can't get it at all. Qwest and Level 3 are spending about 8 Billion to lay long haul fiber just in the US. This is for backbone use. The cost of bringing true T1 speed access that last mile to all of the households currently served by cable (for example) is estimated at $100 Billion (Forrester). Cable modems won't do this, by the way, as they share the bandwidth among all the households on the cable loop. (ADSL might do it, but it remains to be seen how much it will cost to upgrade the POTS lines and install the ADSL server side-- and I seriously doubt ADSL's ability to do this in a wide deployment.) So, by comparison, if Teledesic spends $10 Billion and achieves a worldwide backbone and the local loop delivery, they are going to achieve real global high bandwidth connectivity for very little cost. The only constraing on their growth will be how fast they can build and launch more sats. (The bandwidth can grow by adding sats dynamically.) I see no need for GEO's in this plan and I doubt Teledesic will use them. For internet comms, you don't really want a second of latency, and given the design of the satellites they are using, it seems pointless. Cyberstar is a much lower cost, and it appears, lower bandwidth solution to the same problem. I am %100 confident that Cyberstar will be a great success if executed well. But if you have a market of 1 million customers and cyberstar is spending $2B to service 50,000 of them and G* is spending $9B to service 900,000 of them, its clear who will make more money. I assume they are both getting the same price, and are providing the same bandwidth (though I think Cyberstar is lower bandwidth.) You can see how cyberstar would be less profitable. (These are used as an example. I'm trying to make the point that both can service customers very profitably, but the fact that C* is cheaper doesn't mean its more profitable- it will have significantly less capacity.) Dragonfly