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

To: djane who wrote (3342)	3/9/1999 10:29:00 PM
From: djane	Read Replies (1) \| Respond to of 29987

Article on China Telecom [200M wireless users by 2010] The Internet Poses a Threat to This Huge Company planetclick.com February 24, 1999 6:15 AM EST By Lucy Weldon Special to worldlyinvestor.com The government in China is trying to maintain a tight rein on the Internet sector. That has major implications for state-run monopoly China Telecom (quote, chart, profile) and for investors who are thinking about an easy way to play China's burgeoning Internet market. "The government is grappling with a number of issues to do with the Internet such as international telephone services over the Internet and the potential threat it represents to China Telecom's (quote, chart, profile) monopoly," says David Gibbons, Hong Kong-based telecom analyst with HSBC. The number of Internet customers in China is tiny. Information Gatekeepers Inc. has estimated that at the end of 1998, there would be two million users out of a total population of 1.2 billion. It's a tiny fraction but what matters is the rate of growth. Users are estimated to rise to around seven million by 2000. That's great, in theory, for China Telecom. China Telecom is the dominant provider of Internet services in China, as well as the leading state telephone carrier. It directly controls 80% of the Internet Service Providers (ISP) traffic and licenses out the remaining 20% to private ISPs. But, the tug of war between the state and private sector providers of Internet services has already begun. Certainly, among ISPs, prices are already coming down. And there's competition on all fronts relating to the Internet with the development of Chinese language portals, more ISPs and rising levels of computer sales. Plus, Internet telephony poses a significant threat to China Telecom and its monopoly. While the government is restructuring and opening up the tightly controlled telecommunications sector, it also wants to have China Telecom remain as its dominant state carrier. It is a careful balance between opening up competition and keeping a tight hold of the reins. So far, foreign providers do not appear particularly welcomed and this will no doubt continue to be an obstacle to China's entry into the World Trade Organization (WTO). Internet telephony could, on the other hand, be an opportunity. More specifically, it could be a low cost and innovative way to open up the competitive arena in China. And at the same time, China could be at the vanguard of a potentially more efficient technology. So far, that looks like one too many leaps forward. At the moment, Internet telephony looks a considerable threat to China Telecom. It's been reported that an Internet telephone operator in Fujian can charge less than one-tenth what China Telecom does per call. But as Alan Pyne, partner at London's telecommunications consultancy Schema, cautions, "Internet telephony's appeal is based on the cost advantage of sending a call over the Internet. This advantage is thought to be short lived for two reasons. "Firstly, Internet telephony will have to introduce a billing method, which will reduce the cost advantage, and secondly, international tariffs are plummeting in deregulated markets. In Europe and the USA, international tariffs have reduced by as much as 60% per annum. This trend reduces the benefit of Internet telephony," he says. The prediction is that the mobile telecommunications sector is ripe for greater competition. It's been reported that there are 20 million mobile subscribers and that the government wants to increase that number to 200 million by 2010. The MII has submitted a plan to the State Council of China, which includes the proposal to open up China Telecom's fixed line network facilities on a resale basis. At this stage Internet telephony is not included in this anticipated wave of liberalization despite reports of entrepreneurial activity jumping the license gun. The Ministry has recently announced that Internet telephony services licenses will be provided later this year and has strongly stated that only license holders can offer Internet telephony. No announcements have been made which providers will get a license. But analysts suggest that only China Unicom, the second state carrier, would be granted a license alongside China Telecom. Lucy Weldon is a journalist based in Kuala Lumpur, Malaysia. She is the author of Private Banking - a Global Perspective. © 1999 Worldly Information Network, Inc.

To: djane who wrote (3342)	3/10/1999 3:13:00 AM
From: Maurice Winn	Read Replies (3) \| Respond to of 29987

ICO Bites the Dust Thank goodness for the mayhem in Iridium. Already one of the satellite voice systems has dropped out and Celestri folded into Teledesic. A second generation Iridium looks unlikely. Now ICO bankers are seeing the mess in the LEO business and getting cold feet. Wisely so too because they would not be able to compete with Globalstar and it will help my profit and prevent their capital losses if they cancel now. This is so cool! Thank goodness for Zenit crashing and Iridium crashing - it has taken all the heat out of the industry so we can calmly get our satellites into orbit and take the whole market for ourselves. [Well, it is maybe a little bit over the top to be grateful for Iridium crashing, but every cloud has a silver lining]. No more over-exuberance and 'profits for everyone' and heaps of market for everyone who could be bothered helping themselves to customers who would be facing a seller's market. Now it is a competitive market with huge overcapacity and competitive advantage is going to come to the fore immediately. It already has! Luckily, Globalstar has most of the competitive advantage. Sure, Iridium covers the poles, oceans and stuff right now whereas Globalstar will take a year or three to match Iridium coverage. Sure GEOs can do phone box calls for zilch price and undercut Globalstar [if you can be bothered talking then saying 'over']. These are nervous bankers - consider the ICO financing cancelled! ---------------------------------------------------------------- Even so, bankers are increasingly aware of the competition, not only from the other two global operators, but also from UMTS, and from regional satellite projects. Sources point out that when the three global projects were conceived the market was thought to be able to sustain them. But now the mobile operators have moved in fast, and UMTS could eventually offer global coverage (assuming roaming) with greater bandwidth capacity than the global satellite systems. ----------------------------------------------------------------- Maurice