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

To: Andmoreagain who wrote (4022)	4/21/1999 1:03:00 PM
From: mmeggs	Read Replies (1) \| Respond to of 29987

You are taking a leap of faith, because NO ONE knows for sure how much demand there is out there. There have been various studies of potential demand, with a reasonable consensus of about 30 million potential users, plus the market for fixed terminals. I can't remember the study specifically I am sorry, but it went on to say of the 3 billion people worlwide without access to dependable phone service, approximately 280 million of them could afford it if it was available. It is not specific as to potential market at various price points, but I will take my chances with the cheapest option out there. I think we are all making a mistake sometimes when we only look domestically to consider potential demand. This is a xenophobic view that I think is ignoring the thrust of G's biz plan. As Bernie stated in the recent conference call, the primary market is for what he called "regional roaming". He used an example of Mexico City -- in the city there is adequate cell coverage, but 10 miles outside the city there is nothing. It is anecdotal of course, but extrapolate that just a little and you start getting impressive numbers. One of I's many failings is a marketing plan that targets outdoor enthusiasts and international travelers. This emphasis has created a perception of Iridium as a luxury rather than as a utility. The price for phones and minutes serves to reinforce this view. I think the plan I have seen for G is comparatively much better, first and foremost because it is cellular providers doing the marketing rather than G* themselves. Take note of the fact that one of the largest shareholders is the combined ATI/VOD -- to the extent they have not wavered in tehri commitment to the system I believe there is a market. No one can definitively tell you how much demand there is out there. Broaden your horizons a little bit and think beyond "there are few holes in US cellular service." Do the math for a hypothetical situation where they even use HALF of the constellation capacity. .35 profit per minute x 6 billion minutes with 25% of that going to shareholders divided by 82 million shares. Give it a 20 or so multiple and you're STILL making 5x you money from here. I know, that's pretty rough, but it works. mmeggs

To: Andmoreagain who wrote (4022)	4/22/1999 4:56:00 AM
From: Maurice Winn	Read Replies (2) \| Respond to of 29987

OT How about we have a good discussion here Ohnonotmoreagain, would you please stop telling us how we should conduct this discussion. Your off topic lectures are wearing thin. Please post only something useful to me. I will tell you if you are doing okay. [See how that's an annoying attitude? Coming from somebody who has contributed nothing, it is specially irksome.] Mr A's technical stuff is great. You can always start your own stream of consciousness with what's important to you. If you don't like something, click on by. Your contribution has been rated by me as being much, much, much less valuable than Mr A's or any of the other technical posts. See how that's annoying too? Thanks if you can make a good contribution. Now, back to orbital theory, Kepler's laws and Fourier Transforms. Marketing ideas are good too. No need to apologize Mr A! I for one, greatly appreciate your advice. Maurice [Let's talk by private mail if you want to debate this further - it isn't much fun for readers to see this stuff]

To: Andmoreagain who wrote (4022)	4/22/1999 4:07:00 PM
From: Maurice Winn	Read Replies (3) \| Respond to of 29987

Globalstar Demand - and random orbits Oncemoreagain, you asked: ------------------------------------------ "...The market for satellite-based telephony is not at all large enough to justify the expense of building a system to provide such service. Globalstar's own IR contact once told me that it would not be wise for Globalstar holders to wish for Iridium to stumble, which I took to mean that it would indicate a lack of market acceptance of such services. I ask again for anyone here to go beyond the science of the satellite business, and to address the real reason this board exists - to make money. Who are the users, how much time will they spend in satellite mode, and what is the demographic proof of the answers to these questions?" ---------------------------------------------- The users [over the next 10 years] will be everyone with ears. That currently is about 5 billion people depending on the price of the service. I'm sure you've heard of price elasticity. As the price gets cheaper, more people will buy and this is not a linear relationship meaning tht at a high price, few will buy, but there is a price at which suddenly there is a LOT of interest. Initially, Globalstar can sell the minutes at 15c and make a good profit. At 15c and even with a cumbersome phone compared with terrestrial handsets now being sold, a LOT of people would buy one. Even at $1000 per handset. There are hundreds of millions of cellular customers now and they nearly all get annoyed at gaps in their service and they are paying MORE than 15c per minute [mostly]. So, Globalstar can sell most of the minutes and the handset could set to Globalstar preferentially and switch to terrestrial mode if no Globalstar signal is available [say inside a city, inside a concrete building where the signal needs to go in at a low angle through the windows]. Car manufacturers [many of them] will build Globalstar into cars, initially as an option, but after a few years, who would buy a car without Globalstar in it? I reckon the small cost would be worth it to nearly everyone. So we already, with the first constellation [the second and third will be much, much cheaper] have a price competitive system. The only question remaining is how far we can raise prices without giving sticker shock to too many people. That is a very nice marketing position to be in. When people talk about 'the market for satellite-based telephony' being a certain size, they always omit to say at what price. Which just goes to show how hopeless their market research is. They also don't report for what sort of handset, quality of call, voice delay etc. The reason it was considered bad if Iridium stumbled is that it would show the acceptable price [assuming quality was okay] is WAY lower than people hoped. Globalstar would therefore expect reduced margins and would have to sell the minutes cheaper to get them used. This has all been covered before, so it is not true to say the thread is all technical. All this is old stuff. The important stuff is the technical stuff. The market is now at the suck it and see stage. How much time will they spend in satellite mode? All the time! They'll switch to terrestrial only if GSTRF is unavailable. That would be so much fun and would really stimulate demand and media interest. Free advertising by the terabyte! I'm in favour of a free or very very low startup price for Globalstar, then increasing it if demand for high priced handsets is hysterical. When 10% of the minutes are being used, the price could start rising and when 99.9% are being used, the last little bit could be sold at $100 per minute to a spot price customer whose yacht is sinking and $100 for a mayday call is not a worry. Iridium is grinding their way down from an absurdly high price and they are doing it with almost no customers on the network after half a year. My bottom up marketing plan would see millions of customers in a short time! Both systems would be making no money, but guess which one would be in a position to start making it, in very, very, big heaps. [Those are Irwin Jacobs 'very, very's]. So there you go, Marketing is a doddle. Globalstar is going to whup butt [I guess that's a phrase y'all would know]. Now, just how quickly will those photovoltaics degrade? And just how higgledy-piggledy can an orbit get. Mr A is certain that fuel is limited. Seems like random orbits would help [once there are hundreds of satellites up there] and with batteries and spot pricing, there would be no misuse of resources as all satellites would be fully used in random orbit mode - batteries would carry them through busy or quiet times [say the random orbits put too many in one place at one time or too few]. Mr A. could forget about really careful fuel management. Launch less fuel and more photovoltaics for the same launch weight. Maurice PS: I agree with Goodboy about Iridium, restructuring and equity ownership. Motorola is in the box seat. They made the money from design and construction, they will make the money from handset sales and they will buy the system from existing shareholders for nearer zero than the IPO price. ICO is a similar story.