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

To: RMiethe who wrote (4806)	5/21/1999 1:04:00 AM
From: brian h	Read Replies (1) \| Respond to of 29987

RMiethe, Thank you for your efforts (DD. I mean). I really appreciate it. Now could you tell me the information you got was from Mr. Quentin Hardy (the DD reporter my friend - And. was so fond of)? (VBG) Best, Brian H.

To: RMiethe who wrote (4806)	5/21/1999 1:15:00 AM
From: Maurice Winn	Read Replies (3) \| Respond to of 29987

Mr Miethe, thanks so much for that reasoned review. Overall, it's a point of view with which I agree. The question is how to handle the initial stages to rev up demand to a high pitch. In 3 years time, the reviewer's comments make sense to me. Some comments: The US$ call prices in Australia are not $1 per minute and I doubt prices in Hong Kong are US$1 per minute either. Also, cellular markets have not been competitive until now. There has been a monopoly or duopoly situation in most places. AirTouch made the money in duopoly markets, which doesn't take a lot of accurate pricing to make money in. Sure, you have to be careful, but prices are way too high. The existing cellular prices are in free fall and will fall even faster as competition mounts. The principle that a premium over terrestrial cellular can be charged is fair enough for guaranteed connection. In light of limited handset supply, it might be that 30% premiums can be sustained for some time. Maybe even permanently since Globalstar has sole access to CDMA by Qualcomm. Vodafone [it's not called Vodaphone] and others set pricing, not 'the markets'. There are better and more carefully targeted price plans being offered. These are trending down quickly because the cost of providing service is MUCH lower than the prices being charged and minute makers are lowering their prices as slowly as competition allows them. There is a LONG way to go and it will be quicker as the number of suppliers increases. So the 'market prices' are not attached to much reality. There is a tendency to attribute 'intelligence' or 'this is the correct price' to 'the market price'. We need only watch stock prices to see how 'intelligent' market prices are. We need to be beholden to the 'invisible hand' and make sure it is going to cut off our competitor's air supply, not ours. Meanwhile, Globalstar has got billions of minutes to sell, all at once. No building out gradually as demand builds. Bang, all up at once! The important point is to maximize revenue, which is the same as profit for Globalstar. If Vodafone/AirTouch is so certain that they can sell heaps of minutes at $1.50 for $1 a minute profit, they should be ordering 2 million handsets right now. Actually, they should have ordered them last year to ensure they have a huge stack of them ready to sell, lease or subsidize, when the switch is thrown on Globalstar. So if we judge AirTouch by their behaviour rather than their 'market research', we find that they don't believe they can sell the minutes at $1.50. They make that $1 a minute profit without building out any infrastructure, so their profit will be vast. If they are serious, they should be shipping trucksfull of cash to Qualcomm right now, not asking Bernie to have a word with Qualcomm to boost production with piercing eyes and a pushy manner. Cash works much better than piercing eyes and pushiness. Why would Globalstar and the Service Providers plan a liesurely rollout of service over 4 years if they believe they can make $12bn per year profit [for the Service Providers] and $6bn per year for Globalstar additional to that? That makes no sense whatsoever. They should be going flat out, ordering millions of handsets now and raking in $1.50 per minute. They should not be messing around with 30,000 or 60,000 handsets if they have got a red-hot product at $1.50 per minute. USA minute prices are now less than 20c per minute [see the Clearnet ThinPhone plan reported today in Q! thread]. Sprint offers a dime a minute anywhere in the USA to anywhere. Australian construction costs are no higher, so the present terrestrial prices the reviewer quoted are artificial [actually incorrect]. The handsets are very big compared with the ThinPhone and other terrestrial options, so the minute price does not stand alone and assure sales. People will need to have two handsets - one for city use and one for everywhere else. Or one for the car and one for the pocket. Maybe a ThinPhone with Globalstar functionality would sell in the millions at $1.50 per minute, but the 1812 Overture version will not. Price reductions for minutes will be needed to boost sales of such a monster. The central point is, there will be 12bn minutes to sell at the word GO! To maximize profit, we need those minutes sold quickly. Globalstar might be the company to define the market price, not simply track the prices which other companies on the ground have set. Our aim is to make money, not track a market. We should price to maximize our revenue, not match a market. To sell 12bn minutes will take serious Feral Marketing. AirTouch goofing around, pretending they can sell heaps of minutes at $1.50 while ordering a couple of dozen handsets is not credible. As a shareholder, I'm not comfortable putting my trust in AirTouch which is not acting in accordance with their statements. Iridium put their trust in some airy-fairy idea that they'd be able to sell it all to the rich, stupid, business traveller. Well, the business traveller stayed home, wasn't rich, or wasn't stupid, or didn't want a brick-sized handset with short talk-times which don't work in buildings. I do appreciate the comments from the reviewer and agree that when mature, the Globalstar price [with cute little handsets] will sell at a good premium to terrestrial services. It's the action packed first year or two which worry me. A lackadaisacal approach is dodgy at best [and in Iridium's case, fatal]. I think that more or less covers it. I'll have a look through, and please take me up on anything you disagree on or you think I haven't adequately answered. My thanks to you and your reviewer. Maurice [not edited, so I hope I agree with what I've written!]

To: RMiethe who wrote (4806)	5/21/1999 6:50:00 AM
From: Timothy R. Tierney	Read Replies (1) \| Respond to of 29987

RMiethe...Your response on pricing is absolutely the best explanation I have seen to date. Thank you. I am reassured about the G* marketing plan.

To: RMiethe who wrote (4806)	5/24/1999 6:38:00 PM
From: Rocket Scientist	Respond to of 29987

RMiethe, found your post 4806 most interesting...it's in a style reminiscent of the once famous and ubiquitous Readware. Just a coincidence? One anecdotal bit of info that contradicts some of what was said in this post: I was speaking with an Australian travellor recently who told me that cellular systems cover 98% of the country's population, now. He said that Optus and Telstra were the dominant providers; Vodaphone was third. He volunteered that "farmers" in out of the way places were starting to adapt satellite phones from "a company called berylium, indium, something like that..." which gave me a chuckle! The visitor's from Sydney, and it's not clear how well he really knows the situation outside the urban centers, but he certainly had the opinion that cell coverage is very good in Oz.