Although the announcement seems be centering around the completion of testing my thoughts keep wondering what GlobalSat wants from SAS's services, probably my thoughts have been spurred on by talk of GlobalSats revenue. So here are my thoughts semi backed up by Globalsat Group CEOs own words, as well observations from GlobalSats own twitter account.
So quickly my thoughts on GlobalSats current revenue. Quite simply I'm of the opinion that it does not matter. 1) GlobalSat is trying to expand its business not simply cut costs by swapping out suppliers, I'll expand on this and back it up later. 2) Revenue does not necessarily give indication on a companies ability invest in growth. They maybe full leveraged in debt, no profit ect. It's a private company, we don't know, so its all kinda pointless talking about revenue.
So back to point, what GlobalSat wants /Point 1. I am of the opinion that GlobalSat is looking to expand their market not swap out their suppliers. If you look at their recent twitter feed they are heavily aligned with Inmarsat, I'll leave that for you you to flick through the twitter feed to realize there is no immediate signs that they are looking to change their partnership. So what I take from that is that Inmarsat is not offering what SAS can offer. That is the only reason GlobalSat would look at a StartUp. SAS is offering some thing that has no competition for whatever service at X price point.
Below is an extract that matches my thoughts.
As Frost & Sullivan’s Latin American Research Manager Ignacio Perrone notes, this new agreement with SSG “opens the door to a stronger Globalsat, with a broader offer”. Globalsat understands that in order to go beyond its current customer base in Latin America it needs to offer lower service costs, which is something Sky and Space Global’s technical solution enables
So expansion of markets. What markets? Well I don't think phone calls (more hunch than fact). I think something to do with agriculture. Which makes sense as agriculture is one of only a few industries that you will find in rural areas. South America is also turning into one of the major breadbaskets of the world.
So to fit in with this agri theme, IOT/M2M will be the main component of any contract. I'm not excluding voice calls I am sure it will make up a portion.
Below is another extract from GlobalsSat CEO
The technological breakthroughs and paradigm shifts under which Sky and Space Global is working would allow us to offer machine to machine (M2M) and Internet of Things (IoT) connectivity quite below the current price points, which in turn would allow a significant increase in the cost-effective use of satellite communications,” Palacios notes.
So to summarize, Expansion of markets, Not replacing suppliers, IOT/M2M.
I for one would be really excited if IOT/M2M is the main component of any contract as we know that it is revenue that we will see sooner as opposed to Phone Calls which means more of the constellation needs to be operational.
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