...another interesting post on stockhouse by InDaMoney
This is the text of an audio interview with Alex Dolgonos, CEO UBS, conducted by The Wall Street Reporter last fall
Interview
Alex Dolgonos, President and Chief Executive Officer, spoke with Wall Street Reporter Magazine.
WSR: Could you describe how you became CEO at Unique Broadband?
UBS: The company was started in 1990 as a manufacturer of microwave components and subsystems. The Company was a two-man start-up, which
experienced continuous growth and in 1998 Unique Broadband Systems went public. At that time I became the CEO and Chairman and I have been ever
since.
WSR: What is Unique Broadband all about?
UBS: Unique Broadband is a manufacturer of telecommunication equipment, specifically focusing on the broadband wireless market; applying its knowledge
to MMDS, digital broadcasting, SDARS, satellite direct digital and audio broadcasting, visual audio broadcasting and other digital video delivery systems that
use the broadband wireless approach.
WSR: Recently, you put out some new products and services in the market, can you illustrate those?
UBS: The new services and products that we are offering right now are products designed specifically for the digital satellite and digital delivery systems that
are currently being deployed in the United States. One of them is a CD Radio type system, and the other one is a XM Radio type system, those being the two
largest operators. Although the current systems that we are offering are geared towards XM Radio and CD Radio, the equipment is compatible with any
SDARS system operators.
Our experience is based on products that were developed for Eureka 147 systems in the United Kingdom, Germany and France. These systems are all
based on COFDM technology, which is a superior method of modulating a signal to deliver high-speed data traffic into moving vehicles and is currently the
only methodology known to deliver multi-media services into a car.
Since the delivery of multi-media services into a moving vehicle requires high bandwidth, typical modulation techniques such as QAM, TDMA and other
similar methods are not capable of dealing with multi-path and its effects on a moving vehicle. So the typical method of delivering high speed to moving
vehicles and high bandwidth type applications is COFDM. We specialize in that modulation technique, and in the last five years we have spent millions of
dollars developing COFDM related products. As of today we offer a variety of different products including, transmitters, modulators, repeaters and
demodulators all targeting this industry.
WSR: How large is the market for this product?
UBS: The market is growing rapidly due to the growth in applications. More and more people require transmittal of digital high-speed streams to moving
vehicles or airplanes. I don't know the actual value of market cap, but we have focused all of our efforts around COFDM modulation techniques. Today’s
industry is geared towards increased capability and reliability of data transmissions.
WSR: Are you looking for other strategic growth opportunities, be it in the form of mergers, acquisitions or joint ventures?
UBS: We are currently involved in a few joint ventures. One of the most noteworthy being the development agreement we have entered into
with Lucent Digital Video. The agreement with Lucent focuses on the development of a specific MMDS system in configuration with Lucent
integration digital video. We are also in negotiations with some of the most influential organizations in the industry. We are one of the
finalists bidding on the XM Satellite delivery systems, which is a SDARS system that will deliver 100 plus music and multi-media channels to
cars all over the United States. A decision has not yet been made, but we have focused a large portion of our research and development
efforts in that area and we are confident that we are a leading authority in the industry.
WSR: Who do you see as the competitive landscape for your company, and what sets Unique Broadband apart from the rest of the field?
UBS: As far as competitive technology, on these specific contracts there is a European (German) corporation, which is part government and part privately
owned. This Company is trying to license their technology in Canada through a Canadian company who is currently one of our competitors. I believe, on
these contracts they are our only competition.
WSR: What are the factors that currently exist in the marketplace that are going to allow Unique Broadband to keep succeeding on a long-term run?
UBS: Well, basically deployment of the SDARS systems in the United States and DAB in Canada. CD Radio and XM Satellite Radio, both of which are SDARS
systems, are one of our primary focuses at this time. We feel that this niche market will be a very large revenue provider for us. This is also true for the
Eureka deployment in Canada, which is a terrestrial-based COFDM radio delivery system for the car. Another area where we are experiencing growth is with
digital MMDS systems. Providers such as Sprint and a number of other companies are moving into wireless broadband media delivery.
We're offering COFDM based modulators, transmitters and demodulators to allow for more reliable transmission to a multi-media environment. These
products will also cover a much larger area than existing products from companies such as Broadcom; for example, who are still utilizing QAM modulation.
COFDM is a superior transmission method for the wireless environment.
WSR: What do you see as the key factors or critical variables that are going to influence your margins in the next few years?
UBS: The key factor is the speed of the roll-out, of course. We are expecting the major equipment purchases to begin mid-2000 and continue
throughout 2001. The contracts that we are currently working on should be finalized in the near future. The other key factors that will
influence the Company are the development of the technology, which we've spent close to five years perfecting and commercialization of
our product lines. Over the next six to eight months our products and the technology in general will be in a better and more marketable
position.
With respect to research and development, we have recently started to capitalize on some of the developments that we have been working
on over the last five years. In the past fiscal year, we've sold prototype systems and test systems to both subscribers and providers in the
United States and in Canada that are providing digital radio services. As well, we have a number of contracts with MMDS providers,
providing them with this new technology for improving the transmission quality.
WSR: Where does the company stand right now in terms of revenues and earnings?
UBS: This fiscal year end, which was at the end of May 1999, our revenue was approximately $9.3 million with earnings of about $80,000.
WSR: Could you give a breakdown of where your sales come domestically and internationally?
UBS: Most of our sales were international. About 70 percent of revenue came from digital radio, about 20 percent from MMDS, and 10
percent from military. We still do military business.
WSR: How can the investment community improve its perception or understanding of Unique Broadband?
UBS: Basically, overall, the technology is fairly complex, and for the general public to read a news release is sometimes just quite confusing. The best advice
I can give is to do some research about the radio and television industries in general. If investors are educated about the state of those industries and the
developments with relation to transmission systems they will have a better understanding of our products, and the growth potential of the Company.
WSR: Is there an essential message that you would like to convey to long-term investors about Unique Broadband?
UBS: Essentially, we are a technological power-house, we develop leading edge technologies that are relevant to today’s market. Our
engineering department includes approximately 50 engineers many with Ph.D. and master level engineering degrees. We have limited
production capabilities, but our goal and strategy has always been to partner with the larger players who have the resources to bring our
ideas to life. Companies such as Lucent and other large providers of telecommunication equipment turn quite often to small or medium
sized companies for high-speed, leading-edge technology development.
WSR: Where can one find more information on Unique Broadband?
UBS: General corporate information is available on our website at www.uniquesys.com, you will also find information there on all the systems I have
mentioned. Other web sites with worthwhile information include Eureka 147, DAB Consortium, and SDARS. Wireless broadband is a very popular area at this
point in time, and information is readily available on the Web.
InDaMoney |
