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Technology Stocks : Brite Voice (BVSI)

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To: Steve W. who wrote (217)	9/13/1997 8:02:00 AM
From: Crash	of 495

Hi Guys! Just got back from the PCS 97 tradeshow in Dallas and I'm trying to catch up on all the postings. This show probably has alot to do with all the recent announcements recently. Companies like to bottle up releases for this particular type of event due to the wider press coverage they will receive. Not to mention the resulting swings in stock prices this can generate. I was standing in Brite's booth at the show when they announced their deal with Sprint. This was something that they had actually been working on for the past year but had been unable to announce until Sprint felt comfortable with the Brite service offering. The lack of roaming capability in the Brite prepaid service was also a concern at the time though this is not as important to Sprint as it is to other carriers. This is due to the fact that Sprint PCS has a nationwide footprint and does not expect their subscribers to roam onto another carrier's wireless network. Another factor that held up the announcement was the slow rollout of Sprint PCS markets. Now that Brite has partnered with National Telemangement Corporation(symbol NTC), they have gained the ability for prepaid subscribers to roam at least in some major markets across the country. The service is still limited in that you can only place calls but not receive them while roaming. This didn't appear to affect the Sprint PCS decision. As for the projected revenue questions, I think if you look at how the service is structured, you will see that it is hard to project the amount of revenue as there are alot of external factors that may affect the future revenue stream. The prepaid service is offered by Brite on a tranactional basis. This means that Brite will install, administer, and maintain a platform in each of the Sprint PCS markets. Brite will be responsible for all aspects of system operation with very some nominal setup charge (usually under $10,000 per market) to Sprint for the service installation and setup. In lieu of upfront revenue, Brite will receive a transactional fee (usually 5 to 8 cents per minute)based on the amount of minutes of use by the prepaid subscriber. Brite will also receive additional revenue for providing customer service to the prepaid subscribers which is billed to the carrier on a per call or per minute basis. The industry standard charge for this service is usually $1 per minute. As you can see, the potential revenue stream is dependant upon how successful Sprint PCS is in rolling out this service. The average prepaid wireless subscriber is currently utilizing about 70 minutes of use per month. This roughly translates into around $5 in revenue to Brite for each prepaid wireless subscriber. This revenue combined with the customer service charges mean that Brite will most likely average around $6 per month per prepaid user. The beauty of this approach is that this is a recurring revenue stream that will stay with Brite as long as the subscriber is using the service. The downside to this approach is that Brite will be required to expend a large amount of capital dollars in order to deploy their platform in all Sprint markets. This will more than likely result in some big charges to the bottom line over the next few quarters. Don't be dissappointed by this and just remember the payoff for Brite is on the backend and will be perpetual as long as Sprint PCS is happy with the service Brite provides going forward. Regards, Crash

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