Kramer, You're right in estimating that ILNK's revenues (from long-distance service) are about the same as FTI's were before ILNK bought FTI. Before ILNK bought FTI in January, ILNK was not providing communications services. In January, FTI had 17,000 customers. In February, ILNK had only 15,000 customers. Go Figure.
FTI previously was marketing through WealthNet, a multi-level marketing company. That's how FTI got the original 17,000 customers. After purchasing FTI, ILNK formed a new agreement with WealthNet. Since there is no new marketing effort, sales must be fairly flat.
ILNK has not yet implemented their "patent pending technology". They are currently one of 280 plain vanilla long-distance resellers. The flat rate through WealthNet is 10 or 11 cents per minute, the same as other discounters such as WorldCom (10 cents). The difference is that the other discounters don't have to pay a commission to multiple levels of people in a MLM chain. Since almost all of the flat-rate resellers are cash flow negative, ILNK must be bleeding bad. Expect a diltion from a secondary offering, but not until the dilution from from option and warrant excercises is finished.
To get a feel for the competitiveness of the long-distance reseller businees, check this site:
thedigest.com |
