IBasis CEO Says Investment Precludes Profit: Bloomberg Forum
IBasis CEO Says Investment Precludes Profit: Bloomberg Forum
New York, Dec. 14 (Bloomberg) -- IBasis Inc., which provides
Internet voice service to telephone carriers, plans to invest at
least $25 million in each of the next two years in its network,
said Chief Executive Ofer Gneezy.
''The analysts say it will be a couple of years down the
road before we make any money,'' he told the Bloomberg Forum,
without specifics. IBasis has lost about $16 million since 1996.
The Burlington, Massachusetts-based company raised about
$125 million last month in its initial public offering. What
IBasis doesn't spend on its network it will use to bolster its
sales and service staffs, Gneezy said.
While there are about 1,000 companies that offer
international phone service, IBasis and rival ITXC Corp., which
raised $75 million its September IPO, are the only two companies
that specialize in carrying voice signals over the Internet for
other carriers. Nearly all of both companies' sales involve
international calls.
IBasis has proprietary software that tracks its signals on
the Internet and ''backs up traffic in the traditional network if
the Internet gets congested.''
''We are unique,'' said Gneezy, 48, an Israeli-born engineer
with degrees from Massachusetts Institute of Technology and Tel
Aviv University.
The goal is to offer the same quality of voice service over
the Internet as the regular network for about a 30 percent
discount, he said.
''Chances are, your voice has traveled over the Internet and
you couldn't tell the difference,'' he said.
IBasis has signed up some of the world's major carriers,
including MCI Worldcom Inc., the No. 2 U.S. provider; KDD Co.,
Japan's top long-distance company, and China Unicom, China's No.
2 carrier, Gneezy said.
IBasis plans to double its capacity over the next year by
adding equipment in 60 service centers worldwide, which provide
Internet connections as well as links to the customer, he said.
Most of its machinery is made by Cisco Systems Inc., the No.
1 provider of Internet equipment.
The company doesn't plan to enter the consumer market, which
already features Net2Phone Inc., VocalTec Communications Ltd. and
Deltathree.com Inc. ''We'll continue to work with the service
providers,'' Gneezy said. quote.bloomberg.com |
