Checkout The Latest News Regarding Iridium Satellite Phone Difference In Cost

The larger US mobile or portable phone organizations have tens of millions of customers. Iridium currently (Mar 06) has about 150,000 - 100 times smaller than main cell phone companies. The fee of its 66 satellite network is about $6 billion, and while those are all sunk charges, the satellites will need to be replaced at some stage.

A similar equation applies for the equipment. Famous cell phone models offer in quantities of numerous millions, and the underlying technology changes little from model to design, allowing improvement charges to be split over numerous units, and with most efficient high quantity production methods. However the Iridium satellite phones are selling quite slowly, and have unique technology in them.

And so, whereas your normal cell cellular phone company can likely make money by giving you a no cost mobile phone and 1000 minutes of airtime for only $30/month; Iridium absolutely can not.

Lack of competition and price inelasticity

You have plenty of selections when choosing a standard cell phone service. But there's only one completely global satellite cellular phone provider - Iridium - and only 1 source of Iridium handsets.

Could Iridium sell its 9505a mobile for less than $1500? Almost certainly - the underlying variable expense per phone sold, to Iridium, is likely $50. No need to decrease the phone price tag, since there are no competitors.

Iridium might choose to drop the price with the handset as being a way of encouraging much more men and women to subscribe for their service, in a similar way to how traditional mobile phone operators give away phones, but to date it has resisted this kind of temptation.

Could Iridium sell its airtime for much less than the rates it does? That's a more complex question; for sure, the variable additional cost of accepting 1 more call onto their network is close to zero, but they have enormous fixed charges that need to be covered. And, a lot like the phone value, for people who genuinely require a satellite cell phone, $1.50 a minute can be a bargain. And for people who don't will need a satellite telephone, even 50¢ a minute is probably as well a lot. Iridium almost certainly feels that for your type of individuals who will need and use its services, its costs are fair.

Future satellite cellular phone cost trends

Thinking about these issues above, we don't predict main drops in either device or airtime expenses occurring with Iridium satellite program in the foreseeable long term.

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