There is no playback recording on today's call.
I'll add a few more notes to what Valueman said:
Mike Kerr, GM of AirTouch Globalstar indicated that Cellstar will be the distributor here and in Brazil for the Qualcom/AirTouch phone (Globalstar tri-mode). The important point, and let me quite Mr. Kerr: "We have it that if you call for a Globalstar phone today, you'll get it tomorrow". Cellstar has outlets throughout the US, and they will be able to deliver the phones effectively to dealerships throughout the US. Same in Canada. Mr. Kerr sees 1-2% of their base in North America as Globalstar customers. That works out, if 2%, to about 350,000 North American users (Canada, Mexico included). I took the base from Air Touch's annual last year. Also said that a technology show last week, the Globalstar product made a presentation and was received by some with the comment "I like the price, I need the phone now".
Jean Claude Legarde (spelling?) Director General of TSAM: very smart, very impressive, no-nonsense. Indicated they are in 30 some countries already as middleman between Globalstar and their (TSAM's) telco distributors. Emphasized that Globalstar is not a global roaming system for the world traveller, but is meant for areas that wire and fiber can't reach. He did say that TSAM has been very conservative in its estimates of usage, and these estimates of Globalstar users are growing. Also stated that fixed services are strong in various Latin American countries, and also pointed out that mobile Globalstar usage can also apply to agricultural industry users fixed in place. On simplicity of billing, he pointed out that the gateway where the phone calls are routed will be the only billing source. He did indicate that TSAM would not offer service in any area till phones were at their distributors for customer pick-up. Spoke about various rural situations and expressed conviction that Globalstar was in demand there, from their own reports of distributor partners.
Luigi Gasparolo (spelling?)of Elsacom-- a no nonsense presentation, reiterated most of TSAM's comments. They are in 28 countries from the Balkans down to the Mediterrenean shipping lanes.
All in all, Air Touch TSAM and Elsa represent some 100 million users billed monthly by these three giants or their subsidiaries, and the three representatives saw no real issue with gaining a percentage of those users that BLS has mentioned.
Globalstar and the partners are finished advertising plans and a one-brand logo for Globalstar phones, and will spend $40 million on advertising, as opposed to iridium's $180 million.
One individual, beyond the Gilat note I posted before, wanted to know why Air Touch bought no more shares of Globalstar last year when ATI indicated they wanted to in the Soros purchase. BLS answered the question, a good one in my view, that while Globalstar's current price is $5-7 lower now than then, Globalstar really now has not offered a plan for the partners to buy more shares at current levels (this includes the past convertible issue two months ago) and has asked the partners not to make purchases of Globalstar in the open market. Air Touch, he said, reserved the money to be used for an increase in Globalstar back in July for their gateway productions (5) in the US, as I understood the final part of his reply.
A lot of sharp questions were posed, no holds barred really, and I think the three reps did come through as frank and explanatory. They neither hyped nor understated what are the issues. On Iridium, they noted only how they believe they have situated their approach to avoid Iridium's problems, and had no other comments on Iridium. Since there is no one major center for distribution, but all local telcos throughout each country/city, the problems Iridium had in that regard will not be one for Globalstar. Looks like 300,000 phones have been ordered already, with 40,000 month in production starting Jan 2000. I think 30,000 phones are ready for August delivery, and 120,000 by year end.
BLS, in a question on cellular buildout ten years from now, and the cost for Globalstar to have new sats by then, indicated that 14% of Globalstar revs (at 12 billion minutes/year) fund the system operations (including interest and amortization etc.) Net free cash can be used to renew the system when the current sats go down. He also indicated, in a further reply to the question on whether cellular will outmode satellite phones, that some 1.5 billion people will never be reached by wire or fiber, that only 5 systems can by world licensing agreement, use the spectrum for satellite mobile telephony, the 5 systems combined can serve some 17 million people while they believe 40 million users are a base for mobile sat telephony clients.
I think that about covers it. |
