Nathan,
If it is details you want, details you get:
1. The target price of the unit is about $15,000 (USD) to the end user. We sell mostly through distribution; what we charge is less than that. However, keep in mind that this is the price for the base station end of things. Customer premise equipment (CPE) is slated to be launched before the end of the year and will have a target price of $2,800 (USD).
2. The size of the base station equipment is immaterial and as was correctly posted earlier, it is designed for rack mounting into standard telco racks. The size and shape of the CPE will be much more attractive.
3. A base station can handle 1,000 customers at the same time and this is because we are using 10 bits to address the remote units (CPE). We can change this to be any number. However, with a 30Mbps base station, 1,000 active users means that each user gets less than 30kbps. Of course not all users will be active at the same time.
4. I said it myself that the reason for our initial success in Europe is that they pay by the minute for local calls which makes the Internet prohibitively expensive. However, you ask about wireless providers in Canada and what they think of Wi-LAN. We signed an MOU (with orders already in the MOU) with RSL Com, Canada, which will see us delivering 1,000 units to RSL in the initial phase. This is a contract comparable to Telia's initial orders. We are working closely with many of the telcos and CLECs in the US hoping to secure some US contracts.
5. Wi-LAN always intends to out-source manufacturing. We currently use the services of JRC Canada (of our friendly neighboring city Lethbridge, Alberta - I do not know how "ASIANS" they are???!!!!) for the Hopper Plus and the RF of the I.WiLL, and Creation Technologies of Vancouver for the digital I.WiLL boards. Wi-LAN's strategy is to be a good member of the its immediate neighborhood. We intend to use local resources to the maximum possible level without affecting our business opportunities. We will move off-shore if the volume and costs justify it.
6. Please refer to the notes of Barry Richards. He has projections for 1999, 2000 and 2001. Of course the assumption is that we will secure new contracts and grow our current contracts: Telia alone is forecasting $9MM (USD) for 2000 and $24MM for 2001. Telia's VP of Sales and Marketing on Tuesday publicly stated that they intend to grow this even bigger.
7. A simple look at our financial statements will tell you that we have a 50% gross margin which means that the cost of goods is about 50% of the selling price. The gross margin on newer products is even better. However, the price erodes quickly.
8. We have to study the telecommunications industry to know that operators take a long long long time evaluating technologies before they adopt them. Once they are happy with them, they work on business plans, approve them, do a large scale trial, plan some more, launch. We are at different stages of this process with many operators. Securing a contract with one of the most advanced and progressive companies (Telia) of course is a positive step that we are trying to capitalize on with North American operators. Telus has praised the link in their annual press release. To refresh your memory, the press release about Telus was in February; the link has been up since October.
9. I cannot comment about projections on the share price.
Again, I am glad you are asking direct questions. I hope you can see that I do not dodge questions. Sometimes, even I do not have the answers. I always say I can bring the camel to the water but he will drink when he wants to (I am Egyptian by background and camels are appropriate to use in my examples; LOL). We are at the final stage of negotiations with many companies but with such large companies, tiny Wi-LAN cannot always dictate the timing of events.
Have a great weekend.
Hatim |
