CEO Watson Interview on Canada Business Report
webcast.newswire.ca
Here is a transcript of the Interview.....
Canada Business Report: Tell us about this Fiberless Optical Market that you have adopted being about ready to explode?
Watson: We have just spent a lot of time touring around the world talking to the various ISP's and GSM markets as well as the Point to Point business users and what we are finding out is that Optical Wireless is really becoming recognized as an acceptable alternative to Fiber and as more and more people become aware of it, it seems more and more uses are being found for the this particular product. You are literally talking about the potential for hundreds of thousands of links around the world over the next short term.
PJD Comment: After reading the Wireless Overview in the Ottawa Citizen today this all sounds excellent. I particularly like the sounds of hundreds of thousands of links when thinking about market $$$ potential. I also like the breadth of the potential customers (ISP, GSM and Point to Point) and it reminds of what I read in the Alcatel article today. Sounds like a potentially good fit.
From the Alcatel Article....Who needs fixed wireless? An office building that sits on the edge of a city's core, beyond the reach of the fibre network. Entire towns those are too small to make saturation with fibre service feasible. For that matter, entire countries that have weak telecommunications infrastructures.
Alcatel's fixed wireless customers are the service providers who need to bridge that tantalizing last few kilometers to the end user, usually a small- or medium-sized company which needs to provide broadband Internet access to its employees.
Canada Business Report: What problems will be eliminated as a result of this expected growth in this technology?
Watson: One of the bigger problems is that laying cable and fiber is time consuming and expensive, it can take a long time to get approvals for digs, to get digs organized, and a far faster and less expensive solution is the use of Optical Wireless which allows you to reach high bandwidth speeds without the worry of interference and overlap that you get with Radio Frequency (RF) technologies.
PJD Comment: I like the fact that Plaintree is addressing specific problems that they can differentiate themselves with. Good for sales. Also reminds me of what I read in the Alcatel article.
From the Alcatel Article......Fixed wireless also has the advantage of quick and cheap installation. To extend a fibre line to a building, for example, can take months, by the time official permissions are given, streets are dug up, and the fibre is laid to ground. Once a bay station is in place, however, a building within the three- to five-kilometer transmission range can be equipped to receive Internet signal within half a day or less.
Canada Business Report: In August you said that Plaintree would be ready for the explosion in the Fiberless Optical market and you followed it up earlier this month by just announcing a new product line, the WaveBridge Multiplex Series of Fiberless products. How does it work and how fast is it?
Watson: It is just the first product release and it is the product that the ISP's have come to us and said they needed, that's 10 megabits per second multiplexed with a T1 or E1 link, so speed isn't that high but is quite fast for the ISP's with regards to the existing technologies they are using.
Next will be a dedicated E1/T1 link, which is exactly what GSM market is looking for, and shortly after that we will be following it up with ATM speeds, 155 mbps over 1 and 2 kilometers and that is something for which there is an extremely high demand for also.
PJD Comment: It sounds like they have sales close to being ready for this particular new product (good for an NR). Also each new product is another NR, which means good for the share price. The 155 mbps will be huge for Plaintree. It sounds like they have a solution for what Alcatel needs from what I read in the article.
From the Alcatel Article......."You could truly say that fixed wireless is fibre-like in its capacity to deliver bandwidth," Mr. Brazeau says. Most fibre delivers from 10 to 155 megabits per second. To be sure, fixed wireless doesn't match the high-end of that range, but it can deliver bursts of up to 40 megabits per second. "And that's certainly well up there," Mr. Brazeau quickly adds.
Canada Business Report: Who would your customers be for that, would they be cable co.'s in addition to ISP's?
Watson: We are talking to a number of cable companies that are looking at it as a last mile solution, all of this stuff is primarily aimed at the last mile solution. When they run their main trunk they now need to be able to now hit a number of different subscribers and users in any particular neighborhood and this is one of the fastest ways to do it without the problems of interference and overlap that you get with RF technologies and the fact that you get much higher bandwidth speeds.
PJD Comment: I like that they have a broad potential customer base. Also addressing a specific niche solution with definite benefits to distinguish them from the competition. This is all stuff talked about in the Alcatel article.
Canada Business Report: You are certainly not limiting your efforts to the domestic market, you have talked about customers flying in from all over the world to take a look at your operations. Have you signed any significant deals or are you on the verge of making some big announcements?
Watson: I think we're definitely on the verge of making some big announcements and you are absolutely right, a lot of people are concentrating on the North American Market and we have an excellent presence in the N.A. market but I would have to say that the rest of the world right now, the Middle East, Mexico, South America, Africa, Europe, they are far bigger than the N.A. market and the response has been absolutely incredible in these particular areas also.
PJD Comment: Very strong words to use "definitely in the verge" and "big announcements". I like it and sense a NR soon! These markets were all talked about in the Overview article as well as the Alcatel article. I like the fact that they are international scope and I am sure that is why they took their time to hire a PR firm that has an international network and experience.
Canada Business Report: In August, turning to the balance sheet, you reported a fiscal first quarter loss of just $87,000, that was quite a big improvement compared to a year ago. When will your next set of financial results be released and will it show a profit?
Watson: We should have the next results out within a month to a month and a half and as far as profit forecasts go we are not prepared to give those right now. But, what we have done is we have really slashed Overhead Costs and dropped them down into line, we are right now we are finishing development on the product and the product is really just starting to hit the market right now so for the last quarter we are not going to see any of the sales results that we are going to be seeing shortly because the product as I say is just starting to hit the markets right now"
PJD Comment: In other words, revenue won't be impacted by new sales from new products in the upcoming earnings announcement, Q2 ending September 30, 2000. That is OK because we weren't expecting anything for that quarter and Watson warned early enough so the street isn't expecting much. However, we will see an impact on revenues for this quarter Q3 ending December 31, 2000 and this is great because we weren't expecting new sales until Q1 or Q2 2001.
Also noticed how he said "sales results that we are going to be seeing shortly " and I think that bodes well for contract announcement soon! Normally I would say that it would take a while, based on the sales cycle for tech products, to see sales happening for a new product. But in this case you must remember that they started the process over 6 months ago by prospecting and qualifying sales opportunities with Potential customers. They are in the closing stage of the cycle now and I wouldn't be surprised if there are some deals waiting for signatures. I have a feeling they released this first product for a specific customer and contract and we will hear about shortly. Look at what he said earlier in this interview "It is just the first product release and it is the product that the ISP's have come to us and said they needed, that's 10 megabits per second multiplexed with a T1 or E1 link"
Another great interview and the timing couldn't have been better with the Ottawa Citizen Overview today. It looks like the new PR firm is driving the communication ship now! Combine this with the two big shows this week and we should start to see some activity soon. There has to be a lot of eyes on Plaintree now.
My last comment is that in know way am I saying that I know or have heard of any relationship with Alcatel nor am I trying to elude to any discussions etc. that may be misconstrued and turned into a rumor. I cited examples because it reinforces the potential for relationships with any similar company and helps reinforce that Plaintree is targeting a young, hot and high demand sector. Mind you they do seem to be a pretty good fit LOL!
PJD |
