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Technology Stocks : I-Link Inc (ILNK), VoIP Telephony

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To: Ski who wrote (33)4/23/1997 2:50:00 PM
From: Fred Puppet   of 417
 
Ski, you get it, yet you don't get it. Let me try to summarize:

1. Currently, ILNK leases long-distance lines from MCI. They send analog signals like most everyone else does.
2. They hope to get lots of customers all over the US. This has not happened yet. I doubt it ever will happen.
3. While they are sending analog signals they will continue to lose money. They will have to print and sell more stock to survive.
4. If they eventually have lots of calls between two cities, with the current method they would have to rent lots of capacity from MCI.
5. They plan to digitize and compress all of the analog signals going to the same city.
6. The equipment to implement these "communication engines" (modems) will cost a lot of money. They will have to print and sell new stock.
7. They still need to pay for access the regular local exchange with a regular analog signal.
8. They save money because access to the local exchange is cheaper for a carrier of digital signals. This is due to the FCC regulations, not due to technology. This will change. The advantage will be lost.
9. They also save money because the signal is compressed, and they have to rent less capacity from MCI.
10. The cost to ILNK is not that of a local call. It is more because they still have to rent capacity from MCI.
11. The digital signal has a time delay proportional to the packet size. This lowers the conversation quality. There is no impact on fax quality.
12. Other companies already offer software for internet telephony. Intel offers it for free. True internet telephony costs the customer the same as a local call.
13. All of the major long-distance carriers are testing digital links like ILNK plans to implement. There are no ILNK patents that can stop them.
14. The major long-distance carriers already have enough customers to make this work. They also have much larger R&D budgets.
15. If these digital links are practical, the major carriers will implement them first. ILNK will have no cost advantage.
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