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

To: Maurice Winn who wrote (4131)	4/24/1999 1:26:00 AM
From: ML	Read Replies (1) \| Respond to of 29987

ML, I don't think Iridium will replace satellites. The system will be used until the satellites die and then be scrapped. They have no choice. Satellites, like all electronics, fail at random times. (A few Iridium satellites have already failed in fact.) When an Iridium satellite fails, it must be replaced to keep the system working. Some will fail in each year. They have a few in-orbit spares, but after those are gone, the simply must launch more. If they do not, they will have "holes" in the constellation. The Iridium satellites are designed to work in a lock-step arrangement. With one fewer satellite, you have a hole. This is another sigificant difference between Iridium and Globalstar. Globalstar could operate with varying numbers of satellites. Cancel advertising, sack management reduce operations. Operating costs are actually very low. These LEOs are nearly all capital. If Iridium dropped all advertising and management, they'd never sell the phones or the minutes. I don't think you could make Iridium succeed that way. Iridium operations will always be expensive enough to force per-minute charges to be high. This is why a higher capacity system such as globalstar is so much better. Yes, of course you'd have to add the tail charges and service provider fees to the price per minute, but these are no more for Iridium than other calls. Tail costs for iridium are indeed higher, because there are so few gateways. Almost all calls involve a long distance wire tail. This is not so with terrestrial cellular, and is less so with globalstar, as globalstar has so many more gateways. The difference in tail costs was not really my original point tho. My original point was that there are costs due to this sort of thing, and when you add them up, it is difficult to see how Iridium could ever drop their prices in a major way as some have supposed. It's all a bit irrelevant to Globalstar really because there are so few Iridium minutes available The differences between globalstar and Iridium are what is important. I agree completely that in this kind of calculation it is the difference in capacity that is the major issue.