ClearWorks.net Signs Its First Contract For Bundled Digital Services In
Multiple Dwelling Unit Market
HOUSTON--(BUSINESS WIRE)--June 10, 1999--
Company's Conservative Goal is to Reach 1.5% Market Share in the
$11.9 Billion MDU Bundled Digital Services(SM) Marketplace
Houston-based ClearWorks.net (OTC BB:CLWK) announced today that
it has signed an agreement with Houston-based Charterwood Associates
Ltd. to provide its package of Bundled Digital Services(SM) in a new
156-unit Houston apartment community called Charterwood. This is the
first time ClearWorks.net is providing its services for the multiple
dwelling unit (MDU) market place. The lifetime value of this first
contract is estimated to be $5.4 million in revenues.
ClearWorks builds a fiber-optics network into the new apartment
community and then pre-wires every unit in for a full complement of
Bundled Digital Services(SM). Residents in ClearWorks-wired
neighborhoods are getting Internet connections at a bi-directional
speed of up to 100 megabits per second, which is 2,000 times faster
than with a 56k modem dial-up connection. They get digital telephone
service with all the add-ons like voice mail, caller ID, etc. They
also get digital cable TV with no channel limitations, on-demand video
rentals, closed-circuit security capabilities, an apartment community
Intranet and much more, all from one company. "In other words,
ClearWorks is like having AT&T (NYSE:T), SBC (NYSE:SBC), TCI
(Nasdaq:TCOMA) and AOL (NYSE:AOL) in one Bundled Digital Services(SM)
package," says Michael McClere, chief executive officer of
ClearWorks.net.
Charterwood Associates Ltd. was established to develop a truly
unique apartment community in Houston. The 156-unit complex will be
known as Tivoli at Charterwood ("Tivoli") and is located on the
northwest side of Houston just across from Compaq Computer's world
headquarters. In addition to such unique features as an on-site SPA,
Tivoli will offer digital voice, data and video services to its
tenants. Planned services include 100-megabit Internet access;
on-demand video rental; customized long distance, voice mail and fax
solutions; digital cable TV; a community intranet; and a business
center with color laser copying and printing capabilities.
According to Juana Madrid, manager of Tivoli at Charterwood, "We
believe the result of offering such services in an apartment community
will be phenomenal. Individuals who work at home will now have access
to technology which will oftentimes be superior to that offered in
traditional corporate offices. Parents will be able to monitor their
children playing outside from their computer via the on-site cameras.
No more going to the video store to find that the movie you wanted is
unavailable or paying video late charges. There will be access to
voice mail and faxes via the Internet from anywhere in the world,
along with long-distance solutions that can provide domestic long
distance in the 5 cents to 7 cents per minute range, every day, all
day. The list is seemingly endless."
"Charterwood selected ClearWorks to provide its Bundled Digital
Services(SM) to the Tivoli complex because they are one of the few
companies to successfully integrate digital voice, data and video
services into one company," Madrid said. "In addition, they have
assembled a team of individuals who represent some of the best
technical expertise in the industry. We are certainly looking forward
to a long and successful relationship with ClearWorks."
According to the U.S. Department of Commerce, at current rates of
activity 330,000 apartment starts will be made nationwide this year.
Last year, according to the U.S. Census Bureau, more than 76 percent
of all apartments in the year's first three quarters were made in
southern and western U.S. states, the geographical areas where
ClearWorks.net is primary focusing on.
Even though the market potential for ClearWorks.net's services in
the Multiple Dwelling Unit market is staggering -- an estimated $11.9
billion per year -- the company's goals remain very conservative.
ClearWorks.net aims at adding approximately 5,000 MDU subscribers or
$180 million to its contract base in 1999. This would represent only
1.5% of the total market potential in the U.S.
In addition to a fairly significant market potential, the MDU
market is very lucrative for other reasons as well. "First of all, it
represents a whole new revenue stream for ClearWorks.net," says
McClere.
"Secondly, it is technologically less challenging and also less
expensive to integrate our technology into the apartment community
infrastructure. Therefore, our gross profit margin in the MDU market
can be considerably higher than in other residential communities.
Thirdly, apartment communities can typically be completed much faster
than other residential communities. Cash flow from MDU ventures can
begin much sooner, immediately upon occupancy, making it easier for us
to finance our rapid expansion. And finally, after the project has
been completed, the fees to ClearWorks.net are automatically being
built in the monthly rental payment. ClearWorks will have predictable
basic cash flow whether the tenants actually decide to use its
services or not," explains McClere.
At present, ClearWorks.net has the necessary financial resources
to be able to provide at least 25,000-30,000 houses or apartment units
with its services. "It is important to understand that financial
resources should not be a bottleneck in our industry.
"The length of our contracts with subdivisions or apartment
communities is typically 20-plus years. When the cash flow is
predictable and based on existing contracts, plenty of financing is
typically available," McClere concludes.
"The length of our contracts with subdivisions or apartment
communities is typically 20-plus years. When the cash flow is
predictable and based on existing contracts, plenty of financing is
typically available," McClere concludes.
"We are looking forward to working together with Charterwood. As
a national operation, they are an ideal partner for ClearWorks for
future expansion," says McClere. ClearWorks.net is also currently
negotiating with several MDU developers in both Houston and Las Vegas,
which is the next logical step for ClearWorks' geographical expansion
due to its rapid growth.
Certain statements in this release are forward-looking. Merger
Communications (Merger) is a media relations firm employed by the
Company. Statements and opinions presented here represent the views of
the Company, not Merger, as the release is based on information
provided by the Company. Merger and the Company believe that all
information in this release has been obtained from sources considered
reliable, but cannot guarantee that the statements presented herein
are accurate or complete. Merger's compensation for its
media-relations services, including preparation of press releases,
consists of a monthly retainer and stock. Merger may have a long
position in the securities of the companies in which it distributes
information to the media, and may be buying or selling securities in
the course of its regular business.
The statements made by ClearWorks.net are also forward-looking in
nature. Although ClearWorks.net believes its expectations are based on
reasonable assumptions within the bounds of its knowledge of its
business and operations, there can be no assurance that actual results
will not differ materially from its expectations. ClearWorks.net
believes that its primary risk factors include, but are not limited
to: the need for substantial financial requirements; the need to
develop effective internal processes and systems; the ability to
attract and retain high-quality employees; changes in the overall
economy; regulatory policy; and the mix of product and services
offered in the company's target markets.
--30--MJB/ho*
CONTACT: Merger Communications, Houston
David Drake or Patricia Cunningham, 713/267-2328
Fax: 713/572-2566
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