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To: Geoff Goodfellow who wrote (3648)	4/2/1999 2:09:00 AM
From: Geoff Goodfellow	Read Replies (8) \| Respond to of 29987

MARKET WILL SUPPORT ONLY ONE GLOBAL MOBILE SUPPLIER (Mobile Satellite; 04/01/99) Apr. 01, 1999 (MOBILE SATELLITE NEWS, Vol. 11, No. 7 via COMTEX) -- The worldwide market for global mobile satellite telephony will only support one provider, according to satellite analysts at the Space Technology Business '99 Conference in Washington last week. The global market will be big enough only to support one Big LEO operator, said Carissa Bryce Christensen, division director/technical management for Bethesda-based Futron Corp. Christensen stressed that her market assumptions are based on Big LEO operators achieving full profitability of 30 percent to 35 percent. That means that of the systems currently planned: Iridium LLC [IRID], Globalstar L.P. [GSTRF], ICO Global Communications [ICOGF], Ellipso and Constellation Communications, only one will survive. But Christensen did say that what will set a satellite provider above the rest will be its dedication to the end-user. "The satellite industry is changing from an industry that builds hardware to a consumer-oriented industry-and that is going to affect the transformation of the industry," she said. "The companies that are the most successful at becoming consumer-oriented and focused on the end-user, in terms of product definition and marketing, understand what the customer wants and what the potential customer might want is what is going to be the determinant of success." Christensen also said the performance and availability of mobile handsets will be a driver in the success of a service. "But the ultimate issue is price - and that's where very few satellite applications today can compete head-on with terrestrial systems." Though Christensen declined to comment on which satellite systems she thinks will stand as the industry leader, Iridium very well may be at the bottom of the pack. The company's stock price hit a 12-month low of $19.75 on Monday (3/29), and continued its dissent, down to $15.37 at our deadline. Christensen said a factor pushing the global mobile satellite telephony market down is cellular competition. "[Satellite providers] have to look at what they are selling and to whom they are selling," she said. "But there is a seamless of global satellite service that will only continue - particularly with cellular subscribers." Christensen said satellite providers must target areas that do not offer access to a cellular system. Christensen's analysis is based on a global study she did on commercial mobile telephony providers in 200 countries worldwide. Groups targeted were individuals with little to no access to cellular services, income distribution and demand from international business travelers. "If I look at demand, I can count only enough dollars to support one [service]," she said. "I think this market is tight. And I haven't seen anyone suggest otherwise." But Marco Caceres, senior analyst for The Teal Group, forecasts mobile satellites will make up 44 percent of all satellites launched by 2008, with a market value of $8.2 billion - 16.5 percent of the industry's total value. However, Caceres said there will not be another peak in the telecommunications sector for another 14 to 15 years. "About half of the total market demand in terms of value will come from North America," Caceres said. Even so, analysts think the profitable time for space ventures has yet to come. Caceres believes that the market truly will become commercial when reusable launch vehicles bring launch prices down to around $500 per pound from the current $10,000 per pound. Low Income Countries With Cellular Cambodia 20,000 subscribers China 6.8 million subs. Kenya 2,800 subscribers Nigeria 13,000 subscribers Pakistan 65,000subscribers Viet Nam 68,000 subscribers Source: Leslie Taylor Associates This drop in launch price also may stimulate expansion in the space industry, such as university research satellites. But Christensen disagrees, suggesting that launch prices will decrease, but not dramatically. "I think [the market will be stimulated instead] by a learning curve effect - meaning as individual operators learn from operating their systems and learn from their competitors, that primarily will push down prices in technology and marketing at a faster pace due to the greater number of users and satellites." Above are markets in which analysts think mobile satellite service providers may do well, offering instant connectivity without the need to build terrestrial infrastructure. According to Leslie Taylor Associates, in these cases, many of the subscribers will be nationals, and many of the calls could be local or in-country. Christensen said she thinks in the future, the government will take more of an active role in purchasing mobile telephony services, and will become a healthy customer to the emerging market. -0- Copyright Phillips Publishing, Inc. This article was sent to you by an Inquisit subscriber who thinks you may be interested in subscribing to our service. To find out more about Inquisit, or to sign up for a free trial subscription, visit us at inquisit.com. Delivered via the Inquisit(TM) business intelligence service. All articles Copyright 1999 by their respective source(s); all rights reserved.