TUTS notes from AEA 11/6/00
vcall.com
- Tom D'Aruia? CEO
- 210 ees
- pioneered internet access for the residential area
- March 2000 was secondary offering to expand in commercial space
- IPO was 1999
- Intellipop platform is new product
- Sell equipment to service provider customers to multi-dwellers. MTU is multi-tenant unit.
- 1/3 of people live in multidwelling units
- 75% of businesses are in multidwelling units
- 3% of MTU users have appropiate equipment vs, 80% of DSLAM users?
- Access to copper is not an issue since legislation to open basements
- Want to provide more services for each network dollar spent
- Business is expanding overseas
- Alot of people think we sell to hotels and apartment owners, we sell to service providers
- 50 service provider customers
- 23K building and tenants and 308K mulitfunction lines in 3q
- 120K lines in q1 so growth is well
- believe acquistions is best to grow, SNS technology and others.
- believe that we are a generation ahead of the competition
- We are the leader in the market space and listened to customer about speed and featured wanted in the products
- Intellipop is a service centric model
- We don't make optical networks and set top boxes, but rather the middle product.
- I don't anyone who can do the things we do.
- We see alot more interest in the NTU market and competition is increasing.
- We are seeing consolidation in service providers
- Service provider seeing basic revenue is sloping downward.
- people will pay more money for higher service
- T1 access is $300/mo is basic bandwidth, we can add instant messaging, web server, internet caching, VoIP, business TV, several other products and get $2200/mo from customer
- We don't make the products for those services but manage them in our box.
- Basic model is to bring a big pipe into the building and offer many types of services.
- Intellipop is 24 port VDSL, 24M, ATM network, with signature switch. ATM gives us the ability to slice bandwidth into segments.
- Signature switchs can switch services during the day.
- Customers want multiple T1 as it is easy to scale up for them
- Quantum Bridge and Netro are partners of ours.
- Juggling these various services is not an easy thing to do. Customers want to offer multiple building to multiple tenants from one place and this is what telepop does.
- CSCO, COMS and CMTN have entered the NTU space in the last few months. This validates our product concentration in NTU.
- Intellipop in one box does what competition does in several boxes (like CSCO).
- It has its own power supply and own cooling unit in telepop.
- COMS has four boxes to do what Intellipop does.
- CMTN is 2.4M, COM is 10M, CSCO 8M products. We are 15M and 26M asymmetic.
- q3 announce last month.
- fifth quarter of sequentially triple digit growth
- 66M in rev in three quarters vs. 50M predict for the year.
- three quarters of increasing gross margins 47% last q
- Proforma profitability last q
- Bell Canada is a customer and larger telcos should be interested.
- Felt we listened to the customer and Intellipop is the result
- Customers have raised capital due to being behind in buildout in their networks and increased demand. We believe they are getting more selective and the company that offers the better product will win.
- I'm sure that there are some customers that we have to check credit with, but core customer base is strong with capital.
- Last four customers that I visited said significant demand, but are being selective with money.
- Internationally we rely on partners to sell our product.
- Korea is interesting and turbulent place. Dreamline has done better there. We have sold equipment to Trigen? for five consecutive quarters which PDYN and other competitors did not. Korea got all excited and bought this telco equipment form vendors and found out that it takes longer to deploy it and pushed out orders this last quarter for companies.
- Trigen was not a 10% customer last quarter.
- A potential customer said when they go into a building they spend 80K to turn a building and spend three times that much over life of the building. We are talking about turning on the building for 10K with use of our product.
- ASPs - we continue to take margins higher, components are difficult to aquire
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Starting DD on this fallen stock. Only listened once and not too familar with the company.
Jack |
