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

To: Rocket Scientist who wrote (4832)	5/21/1999 3:21:00 PM
From: RMiethe	Respond to of 29987

Good point, as usual, Rocket Scientist. I still think that poster Winn has some good insights into the Air Touch US pricing. The pricing numbers for the rest of the telcos outside the US seem to me to be in line with the basic cell phone universe. The research we get on that market is highly dependable, and is never rah rah, or even optimistic. More dry and "if this, then that" type of presentation. Two things keep coming back to me on this pricing and Mr. Winn's good logic-- the two do not mesh, though. BLS did say, and we had it confirmed outside of his organization (in line with due diligence requirements), that the resellers have raised their initial per minute charge. That they have done. In fact, I think that you can follow through on that and say Globalstar probably could have gotten better than the $.47/minute rate they negotiated if they saw that the resellers later on would raise their initial entry price. I can't say for certain, but that sounds reasonable to at least me. The second is Air Touch management's belief that $1.50/minute will work in the States. They have been quite public on that-- even in the CC, and in subsequent follow-ups. I don't know if that is PR, but we have been an owner of Air Tich shares for quite some time, and are somewhat familiar with their pricing goals, and how/if/when they are achieved. That is why I am willing to give them some slack on this $1.50/minute claim. Air Touch would not go to the market with an outrageous price, only later to slash it drastically. They don't do things that way-- at least have not in the 5 years we have owned their shares. Thanks for the good clear thinking in your response to my post. I did not consider the roll-out portion requiring the sales force issue that you correctly brought to my thinking.

To: Rocket Scientist who wrote (4832)	5/21/1999 6:28:00 PM
From: Maurice Winn	Respond to of 29987

RS, I agree with your post. There does have to be a balance and I do exaggerate - it would be hard to produce and sell a million handsets between Sept and Y2K. But some Feral Marketing would see some serious action. The people selling these handsets will be people who sell terrestrial handsets. They should already be trained. It isn't that difficult to learn how to work a handset and how the system works. I bet Qualcomm/Globalstar/Vodafone are not planning sales direct from the end of the production line, direct by FedEx to the subscriber. Dell can do it, why can't Qualcomm? They should be figuring it out because that's the way of the future, not the 1980s 'stuff the distribution channel' model full of middlemen and warehouses. This is a $$multibillion$$ opportunity cost being incurred. A bit of haste and market stimulation wouldn't go amiss. It's all too sleepy. They can save a lot of need to 'train', 'sell' and mess around by creating a buying frenzy. People don't need a lot of training for buying teletubbies or beanie babies. Word of mouth is the best selling technique - the subscribers teach their friends how it works and how good it is. The news media do the same. This situation is unusual because there are instantly a vast number of minutes available. It's not like ramping up something where most value is in the actual item the customer buys. Here, they buy a thing [handset] which costs maybe $200 to make, to get access to a network which cost about $4bn which is $40,000 per subscriber if it has 100,000 subscribers hooked up. So the handset is the trivial item, until there are 6 million subscribers, by which time the handset component of the network will be $1.2bn [or $6bn retail if prices hold]. So a rapid rollout is crucial to maximize profits. But as you say, a balance is needed, but I say, balanced much more in the direction of FAST! Maurice