Here is just one example of what the market is currently ignoring as it concerns the growth of the DSL market. Many of these companies will be acquired by larger Telecom companies because of the rapid growth of DSL use.
Cybertel Communications Corp. - VoDSL Making Inroads into Baby Bells' Markets by Reducing Businesses Dependency on Expensive Local Phone and DSL Services
San Diego, California
The American high-speed Internet market continues to develop by leaps and bounds. Earlier this summer, two of the largest telephone companies in the U.S, SBC Communications (NYSE: SBC - news) and Verizon Communications (NYSE: VZ - news) announced that they had put their high-speed Internet businesses in the hands of smaller national competitors, Prodigy Communications (NASDAQ: PRGY - news) and NorthPoint Communications (NASDAQ: NPNT - news), respectively.
Clearly, newer players are driving the market development. For example, Cybertel Communications Corp. (OTCBB: CYTP - news), which is focusing primarily on building a Sonus Networks-based (NASDAQ: SONS - news) state-of-the-art IP network throughout the U.S., recently acquired LDVL, Inc. a leading DSL service player in New York City and several other major East Coast metropolitan markets. LDVL, which stated today that it will begin operating under the new name Cybertel East, is focusing on providing DSL and Voice over DSL (VoDSL) services to upscale residential customers and small business users - the most profitable market segment in telecommunications - on the East Coast. The Cybertel subsidiary expects to grow rapidly in this expanding market segment.
The DSL market continues to grow. DSL is going be available to at least 70% of U.S. homes by 2004, and according to Telechoice the number of Voice over DSL lines (VoDSL) will mushroom to 7 million by 2004, almost 20-fold from the current penetration levels. The adoption will be even faster in the corporate world. Businesses of all sizes and types are turning to DSL as the preferred means of utilizing faster and lower cost Internet access.
``Cybertel East is ideally positioned to take advantage of this growth,'' said Richard Mangiarelli, CEO of Cybertel Communications Corp. ``It has an existing sales force and a product offering that should enable us to produce up to $74 million in sales in the East Coast alone in 2001. It has working relationships and/or signed contracts with many of the industry's leaders, such as Intermedia (NASDAQ: ICIX - news), Covad (NASDAQ: COVD - news), Digex (NASDAQ: DIGX - news), AT&T (NYSE: T - news) and Microsoft (NASDAQ: MSFT - news).``
Even though the bulk of Cybertel East's revenues may come from DSL services, VoDSL is just around the corner. It allows carriers to split a single DSL Internet connection into multiple voice circuits, allowing one copper wire to carry several voice calls, giving business customers multiple lines at very low costs.
``DSL is rapidly changing the marketplace. Most small businesses spend 900% more on local voice traffic than they do on data. They are used to spending exorbitant amounts on local phone service. But, by bundling voice and data and delivering them via VoDSL and a broadband pipe over the Internet, we can create the types of bundled packages that can alleviate the need for small businesses to pay an arm and leg for their local phone service,'' Mangiarelli explains.
These developments can make Baby Bells feel extremely uneasy. When small businesses realize that they don't have to pay for local phone service anymore, they will start taking their business to companies like Cybertel. Traditional telecommunications players are teaming up with newcomers as a last resort to capture market share in the market situation.
Bundled service packages are already on their way. Cybertel is already offering all of its customers free dial-up Internet access, a new service that has enabled Cybertel to rapidly expand its customer base without jeopardizing its profitability. The offer has been enthusiastically received by the company's growing customer base.
``It is highly possible that in the very near future, any businesses who utilize value-added high-end telecommunications services will end up getting their local dial tone for free or next to nothing. Voice traffic is clearly moving from the traditional circuit switched network to IP based networks,'' says Mangiarelli.
Earlier this summer, Cybertel announced that it plans to build the world's most advanced VoIP/VoDSL network. The network, which is expected to allow Cybertel to become the first major carrier focused exclusively on Internet telephony to introduce a VoIP network with 1+ dialing, will rely heavily on technology from Sonus Networks. Once completed, the new network will enhance Cybertel's profitability by providing the company with higher margins on all of the services it offers. It will also put Cybertel in complete control of the network it uses.
About Cybertel Communications Corp. Cybertel is a La Jolla, Calif.-based fully integrated telecommunications service provider. It supplies a wide range of telecommunications services. Cybertel can offer highly competitive rates to its residential customers on long-distance, personal 1-800 numbers, calling card calls, high speed Internet access as well as completely free traditional Internet dial-up access with its Internet call waiting feature. For businesses, Cybertel offers a wide variety of value-added services. These included high-speed Internet access (DSL), virtual private networks (VPN), unified messaging as well as Web hosting services.
Cybertel (www.cybertelcorp.com) is also in the process of building a state-of-the-art Internet Telephony network throughout the United States. Cybertel plans to expand its network over the next year to include 56 gateways around the U.S., which will serve the entire country. The Sonus gateways give Cybertel a significant advantage over its competition. Once installed, Cybertel believes it will be the only company with an all-IP network capable of worldwide 1+ dialing.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This news release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements that include the words ``believes,'' ``expects,'' ``anticipates'' or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Cybertel Communications Corp. (Cybertel) to differ materially from those expressed or implied by such forward-looking statements. Such factors include, among others, the risk factors contained in Cybertel's Annual Reports and other filings with the SEC. In addition, description of past success, either financial or strategic, is no guarantee of future results. Cybertel will remain dependent upon future financing for its growth and development, and for it to successfully implement its business plan. No statement contained herein should be construed as indicating that such financing is or will be available, and if available, will be on terms favorable to Cybertel. This news release speaks as of the date first set forth above and Cybertel assumes no responsibility to update the information included herein for events occurring after the date hereof. Merger Communications (Merger) is a media relations firm employed by Cybertel. Merger and Cybertel 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 Communications, its officers, directors and employees own six thousand restricted shares of Cybertel stock, are also entitled to fifteen thousand additional restricted shares and hold warrants enabling them to purchase another one hundred thousand restricted shares at five dollars/share. In 1999, Merger received twenty four thousand dollars and fifty-five thousand shares of Cybertel's common stock as compensation for services Merger performed for the company between 1/15/99-1/15/00. Merger currently receives a monthly retainer of two thousand dollars and warrants that enable it to purchase four thousand restricted shares at five dollars/share per month pursuant to a long-term agreement with the company, which includes the preparation of press releases. Merger typically has a long position in the securities of the companies in which it distributes information, and Merger may be buying or selling securities in the course of its regular business. For more information on Merger's services, visit www.mergerusa.com.
Source: Cybertel Communications Corp.
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