Has anyone heard whether Shant followed up on his promise back in September to make CVUS the exclusive marketing agent for CT&T's technology? See below:
The Wall Street Journal Interactive Edition -- September 11, 1997
The Holy Grail
CellularVision's grasp may exceed
its reach, but it's a quest worth watching.
By BARBARA MARTINEZ
Will CellularVision blaze a trail? Among analysts' concerns is what even the company's prospectus calls a "potential conflict of interest." CellularVision's hardware and technology supplier is a private company controlled by Mr. Hovnanian's family and others. The private company, CT&T, of which Mr. Hovnanian is a partner, holds the rights to the technology used by CellularVision, and CellularVision purchases the transmitters and customer equipment from CT&T.
In addition, according to the latest annual report, CellularVision granted CT&T an exclusive, royalty-free license to use any improvements the company makes in the licensed technology.
For the use of the technology alone, CellularVision, which has never posted a profit, pays 7.5% of its quarterly revenue to CT&T. That amounted to $79,000 in 1995 and $149,000 in 1996. Some analysts want to see CellularVision have control of that technology outright and are concerned that if a better technology emerges, CellularVision's strong ties to CT&T will prevent it from going with a new system. CT&T also supplies companies in Canada, Thailand, the Philippines and Brazil.
Mr. Hovnanian says that CellularVision has been "subject to most-favored-customer clause," meaning it gets as good a deal as
any outsider -- but that the entire agreement with CT&T may soon change. Mr. Hovnanian says he expects to announce soon a new
relationship with CT&T meant to dispel analysts' conflict-of-interest fears. Under the expected plan CellularVision will act as the
exclusive agent for CT&T technology, with CellularVision getting some sort of compensation every time CT&T licenses its technology. |
