Too Good to be True

The story is out about the United Airlines programming error that allowed people to buy frequent flier tickets from New York to Hong Kong for four miles plus taxes – about $32.00.  Sounds too good to be true, right?  The well known adage says that it is….

Such as it is with Satcom as well.  If you see a price that looks too good to be true, you’d better investigate to prevent problems.  Here are two examples:

A state RFP requested pricing for Iridium 9555 satellite phones and 250 anytime, pooled minutes.  There was no mention of service.  The professionals in the business included service in the per minute price and came up with prices around $3.00/minute.  The State selected the lowest bid, priced closer to $1.00/minute.  Nearly 60 days after issuing the award, the provider has told them that they have to pay for monthly service at a total cost ABOVE the total price of the other bids.  That lowest price sure sounded great; until they looked at what it actually entailed.  Too good to be true.

Second example – a government agency requested pricing to call a satellite phone.  This can be done via direct dial, two-stage or a local number that call forwards.  With direct dial, the incoming call is free to the phone but can cost over $6.00/minute.  Both two-stage and local number dialing charges the call to the phone at whatever the rate is for that program.  The agency chose the provider that listed incoming calls at $0.00, not realizing that A) they have to have international dialing on all of their land lines and cell phones in order to call the satellite phones, and B) their land line or cell phone bill will reflect the call charges for dialing direct.  This will cost them thousands of dollars extra.  Two stage and local number dialing incurs a charge of less than one-third of the direct dial charges.  Too good to be true?

So what it the point of all this?  Not to embarrass the people who make these bad decisions – after all they are anonymous for a reason.  The point is to educate, to help you make sense of the myriad of prices you may encounter when buying satellite phones.  Be sure to ask questions – Is this the TOTAL cost?  What other charges will be incurred, separate from the satellite phone bill?  Most importantly, you want to know why one provider has pricing that deviates so far from the ‘pack’.  There are cases where these deviations are thrown out and that is probably a good thing.  This is Satcom – there are no competitive advantages THAT significant.  Everyone ultimately buys from the same network- it is too good to be true that one provider can offer a service for free when is costs $1.79 (or thereabouts) from all other providers.

SO be vigilant and ask the questions because you know what they say: If it sounds too good to be true….it is.

Best regards and Thank You for thinking of GlobaFone.

Louis Altman