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

To: Valueman who wrote (4148)	4/24/1999 7:07:00 PM
From: Pierre	Read Replies (1) \| Respond to of 29987

Some things in the booklet I referenced earlier that I didn't see in the 10K. This booklet is more of a puff piece, a letter to shareholders from Bernie. Market size, using ITU figures: 1. 65% of world's households are without a phone; 2. 50% of world's population lacks cellular coverage; 3. 50,000,000 people world wide on waiting list for phones, average wait 16 months; 4. In year 2000, world wide teledensity (phone lines per 100 inhabitants) will reach 17; Two examples using ITU figures: 1. In year 2000, teledensity in Brazil (175 million people) will reach 12, with a waiting list of more than 500,000 people. G* would meet its 2002 business plan from this market alone with 220,000 subscribers using phone 5 minutes a day. 2. Mexico City (15 million inhabitants), with good cellular service within metro area, has virtually no coverage 10 miles outside the city. G* becomes a "regional roaming" solution. 10 million Mexican residents live in small villages scattered throughout the country. G* becomes a "village phone" solution. A few of my own random thoughts on a Saturday afternoon. The booklet defines G* as providing (1) global roaming, (2) cellular extension, and (3) remote fixed services. The emphasis was on cellular extension, and remote fixed services. I suppose I* has demonstrated that global roaming is not a target rich environment. G's business plan seems to have concluded that from the outset. I'm very comfortable with the cellular extension aspect. In fact, the Mexico City example added another positive consideration to my calculation. There must be many metropolitan areas with full cellular penetration in 2nd and 3rd world countries. My guess is most if not all suffer from the "leave the city, leave coverage" syndrome. That must be a huge population of existing cell phone users who have no real mobility - a natural market already serviced by cellular providers. For minimal incremental cost those service providers can add true regional roaming. I have no numbers to prove it (and lack the talent to make a calculation), but my gut tells me terrestrial cellular penetration into lesser populated areas (1st, 2nd or 3rd world) quickly reaches a cost per subscriber well in excess of the incremental cost of tapping into G. I also suspect that manufacturing technology will quickly render the "size of the phone" issue moot in 2 to 3 years. G's reliance on existing service providers will end the "towers or satellites" construct to be replaced with "systems" composed of towers and satellites. The remote fixed services aspect I'm less comfortable with, at least in the short run. I concede the market appears huge. I just don't see the service provider infrastructure in place to make it happen very quickly. I guess if I were younger, I'd love to secure a contract to build "village phones" in some remote part of the world. But who is in place right now to begin installing such systems? There are no "existing" remote service providers for whom tapping into G is a small incremental cost. Hence, despite the potential size of that market, I suspect the roll out will be slow. Thanks for the link, Brian H. Please bear in mind that the thoughts above are my opinion only, and have been expressed whilst enjoying a sun drenched and beer (well, 2 beers, actually) cooled San Diego afternoon. Pierre

To: Valueman who wrote (4148)	4/24/1999 8:09:00 PM
From: CommSatMan	Read Replies (1) \| Respond to of 29987

From what I have read and understand about Iridium, the system does not work that way. They can go up to a satellite and down to a ground station without using an ISL, if the satellite is in view of both user and ground station simultaneously, but that would not increase their circuits or help capacity. I think they use Gateways as a means to help with international acceptance, not because of a technical need. I don't know what assumptions they make in stating their capacity, just as I don't know G* assumptions. It's just that 10 times the capacity is such a large number, it's hard to understand what makes up the differences. I can easily see 4 or 5 times because of CDMA and operating at lower power, but 10 times is tough. CSM

To: Valueman who wrote (4148)	4/25/1999 3:52:00 AM
From: djane	Respond to of 29987

WorldlyInvestor. The Right Call on Iridium [I speaks back] April 23, 1999 5:14 PM EDT worldlyinvestor.com By Jeremy Pink Editor-in-Chief Earlier this week, our controversial analyst David H.M. Baker wrote a column that praised Globalstar Telecommunications (quote, chart, profile) and at the same time told investors to sell their holdings in Iridium. Baker proved prophetic as Iridium's (quote, chart, profile) CEO resigned, analysts downgraded the stock and firm's stock price plunged. Not everyone agreed with Baker's assertions, however, especially not the folks at Iridium. Soon after we published Baker's column, we received an e-mail from Marijke Jurgens, Iridium's Director of Investor Relations, who felt that Baker's comparison between Globalstar and Iridium was unfair. Who do you think is right? Baker or Iridium? Click here to read Baker's story and you can read Jurgens's e-mail below. E-mail me with your thoughts at jpink@worldlyinvestor.com and I'll post a story with your comments next week. Here is an edited version of Jurgens's e-mail: Dear Mr. Baker, Having read your recent article regarding Globalstar and Iridium I must set the record straight. We are very accessible and would love to have the opportunity to respond to your assertions, which in our view were written in a very biased manner. Globalstar and Iridium systems were designed very differently, which has led to some confusion regarding costs and capabilities. Iridium is designed with inter satellite links so a call can be made anywhere on the planet and carried over the satellite network until it reaches the closest (or cheapest) gateway to its final destination. Globalstar is a bent pipe network, which means that the satellite must "see" a gateway (ground station) in order to complete a call. Globalstar needs to install 38-60 terrestrial gateways to cover the world's land masses (they currently have five built). These gateways cost $20-$40 million each and have not been factored into the cost of the Globalstar network or retail rates to end users. As a result of our inter-satellite links, Iridium becomes its own long distance carrier capturing the largest revenue portion of every call. Iridium is able to net considerably more from each revenue minute generated over its system than Globalstar, with no difference in retail rates to the ultimate user. You are misleading your readers when you compare Globalstar's $0.45-$0.55 per minute wholesale rate (bent pipe satellite piece only) to an international retail rate of Iridium's ($3 to $7), and this only becomes more confusing when the international long distance charges gets factored into the equation. Iridium's domestic retail rates vary from $1.79 per minute (all included) in the USA to $1.30 retail domestic rate in China. The variation depends on the local carrier's charges. These rates are very similar to those recently quoted by France Telecom as retail Globalstar rates ($1.75 + local charges). As for international rates, Iridium rates vary according to location. A call from Mongolia to the USA is likely to be priced in the $7 per minute range, but the local fees are likely to be close to $6 per minute. In this example a Globalstar call would be $1.75 + $6. In our analysis, the retail rates of the two companies are likely to be very similar, with exceptions varying from region to region. I am assuming that your estimate of Globalstar's $0.14 cost per minute is based upon their 7-10 billion minutes per year calculation. Please note that Iridium's 1.5 billion minutes per year is based upon a traffic model that assumes that most traffic is generated just outside city centers, outside the cellular network range (within 200 miles) and come within specific hours. We have not counted capacity in deserts or other remote regions. Iridium has seven to ten billion minutes of system capacity, however unless we can persuade users to spread themselves evenly over the globe and use the system equally over a 24 hour basis one cannot reach those numbers. As a result we have come up with what we feel is a conservative estimate of system usage. This number will increase or decrease based upon what the actual traffic looks like. Of course this is a moot point for Globalstar because it will never reach any of these numbers until it gets its gateway ground infrastructure rolled out globally. I do not believe that this is a win/lose business, both companies are likely to become profitable and provide a good return on investment for their shareholders. Sincerely, Marijke Jurgens Director Investor Relations © 1999 Worldly Information Network, Inc. Disclaimer Created by