All, Warning..this is a negative and long post, so if you don't want to hear a negative opinion about FTEL, then please skip.
I have read the new messages by Frank and Tom, and while optimistic about the possibilities of the Tempest and a "new telephone service", I can't help but feel let down by the company, based on the sales numbers and their postponing or canceling previously announced products.
As a result, I went back to review the press releases on the web site. It is very disappointing to see so many of the announcements of sales and services have not appeared to bare fruit. Also, I personally have a hard time understanding how all the products and services related to a vision of the company based on the Tempest and it's future.
The following are examples of press releases and their statements that don't appear to have resulted in sales and revenues, or products and services that are not being offered now.
1. 10/11/96 Franklin Books Six Figure Sale With Revco Drugs
"Franklin Telecom of Westlake Village, California announced today that it has received an order for the Franklin Asynchronous Communications Co-Processor System (ACP) from Revco Drugs."
"Franklin intends to launch a marketing campaign this winter to feature additional applications for the ACP."
"It has tremendous possibilities for any business needing real-time communications between a corporate headquarters and remote site, such as retailers, insurance companies, health care agencies, etc."
11/11/96 Another Six Figure Sale To Revco Drugs ($400,000)
"Franklin Telecom of Westlake Village, California announced today that it has received an additional order for the Franklin Asynchronous communications Co-Processor System (ACP)from Revco Drugs totaling over $400,000.
COMMENTS: What ever happened to ACP sales, "the retailers, insurance companies, health care agencies, etc."?
2. 12/3/96 FNET offers 800 Number for Internet
12/27/96 Franklin Inks Exclusive Deal for Flat Rate 800 Number
1/16/97 Franklin Sets Flat Rate ISDN Pricing
1/31/97 Franklin 800 Offers Voice Service at Bargain Rates for High Volume Users
COMMENT: Well we all know where this ended up...discontinued service and a law suit.
3. 1/24/97 Franklin inks deal with WebTV
"FNet will also be able to offer a unique package of hardware and communications capabilities to WebTV Networks and its Internet Service Providers."
"This agreement with WebTV is unique in that it is totally pointed toward developing new markets rather than competing for market share."
COMMENT: What ever came of this deal? We never heard another word about it. Were there any sales/revenues?
4. 12/6/97 Premier tech support via 900 lines
"with Franklin's telephony background and firmly established tech support position, we are able to offer this service to other Internet Service Provider's and computer companies without any set up fees and actually PAY them for their technical support."
COMMENT: What happened to this? Were there any revenues produced? Did any ISPs buy this service?
5. 2/11/97 Rescue to stranded AOL customers
"..at FNet we've focused our resources on installing the hardware and making the necessary provisions to expand at a rate that carefully maintains the balance of customers to available lines. This puts us in the happy position of being able to step up and offer an immediate solution now to internet users who are unable to put their business 'on-hold' forsix months while they wait for access."
COMMENTS: For those that remember, FNET was not able to add new customers in certain cities when this was announced. I personally remember this because I had to wait over a month to get FNET service at the time of this announcement.
6. 2/25/97 Internet Passport signs deal with Purchase Pro of Las
Vegas
"Response was outstanding. Purchase Pro anticipates that they will add approximately 30,000 Internet Passport access accounts as they
implement this service during the next twelve months."
"Internet Passport is the exclusive Internet provider for this system."
COMMENT: What were the sales and revenue from this "exclusive" service? Were 30,000 access accounts added? How many used Internet Passport?
7. 3/12/97 Internet Passport & Hughes - America's 1ST Satellite
Cafe
"The Hughes DirecPC allows connected terminals to reach satellite download speeds of up to 400 Kbps."
"Internet Passport, a recently acquired subsidiary of Franklin Telecom, has been instrumental in the development and marketing of the product."
"Internet Passport's president Sparrow Marcioni stated, "We hope to make the World Caf‚ the most intriguing Cyber Caf‚ in the country. Our alliance with the World Caf‚ will allow us to showcase this and
other innovative products to an ideal target market of businessmen and professionals who are already on the cutting edge of the Internet revolution and intend to stay there!"
COMMENT: What did this add by way of sales and revenue. Is anything being done in this area? (I hope the food and coffee were good!!)
8. 3/24/97 Internet Passport inks a deal with DigitalXpress
"An exclusive 5 year agreement has been signed to establish a strategic alliance between Internet PassPort, a division of Franklin Telecom and DigitalXpress,which is owned by Boeing, Computing Devices International (a business unit of Ceridian Corporation) and
Conus. The purpose of this relationship is to combine development and sales efforts of both companies to develop new technologies which will allow 2 way communication via the Internet and DigitalXpress satellite
transmissions."
"Our intention is simple and straightforward: we are developing the most functional satellite Internet Service available to businesses today. With this relationship, we are well on our way to doing this."
"For those who have followed the progress of FNet, Franklin's Internet division, since its inception one year ago, this is a day to celebrate. This agreement is a key element in putting together the one-stop, Internet super-service that we have always intended FNet would be."
COMMENTS: Now it appears this product will be "de-emphasized. What happened to the "the most functional satellite Internet Service"? Frank's statement here about it being a "key element" for FNET's super-service would lead one to believe satellite transmission was the key. Now it appears using FNET for IP is the new key.
9. 5/1/97 Franklin inks 4 major contracts
"Franklin Telecom announced today that Internet Passport and FNet, Franklin's Internet divisions, have signed contracts for Private Label Enhanced Application Internet Services.... The contracts call for service activations to a minimum of 61,000 new customers within the next six months.
We will continue to develop enhancements to insure that our Private Label clients can maintain 'cutting edge' superiority over their competition. Some of these enhancements will include satellite service and Smart Card security access."
COMMENTS: Were the revenue from these new 61,000 customers included in the 9/30/97 financial numbers? What were the actual number of new customers? Were any of the"enhancements" ever developed and sold?
10. 5/27/97 Franklin inks exclusive deal with Peak Technologies
"The pact allows Franklin to obtain exclusive rights to PeakJet's Java programming technology customized by Peak Technologies for Franklin's Satellite applications; this is called the FX Accelerator."
"In conjunction with the FX Accelerator, we will also introduce a new product to be called FX Downline."
"In addition, the FX Accelerator will become a key component in the Premium Internet Services currently being offered by FNet."
"These products will be available June 15, 1997 . Orders are now being accepted for the FNet Private Label product which includes the FX Accelerator and FX Downline."
COMMENTS: These "key component" products were available in June. Were any sold? The FX is now also going to be "de-emphasized".
11. 7/22/97 FNet to co-sponsor Web Market Hollywood with Red
Herring & YAHOO!
"According to Sparrow Marcioni, Vice President of Franklin Telecom and President of its subsidiary Internet Passport, "We have been quietly developing applications and technologies which can directly target the
movie industry and their bandwidth needs. The initial purpose for developing several of our high bandwidth products was to transfer Boeing1s large CAD file drawings and software applications."
COMMENTS: How is the movie industry being targeted? Were any orders receive? Are any pending? How is Boeing using the high bandwidth developed for them?
12. 8/6/97 Franklin Announces E-Commerce Software Product
"Franklin Telecom announced today FNet, one of Franklin's Internet subsidiaries, has completed a proprietary Electronic Commerce software product which will be sold under the name FNet-Shop. The resulting FNet commerce product line will allow both FNet and Franklin Telecom to expand their on-line sales and commerce capability."
"FNet-Shop will start shipping next week."
"FNet has created a group of e-commerce related products under the FNet name that will add a new profit center."
COMMENTS: Did FNET-Shop ever ship the following week? Were there any sales? Are they included in the 9/30/97 numbers? Oh well, it turns out to be "more trouble than it was worth", so it is no longer being offered anyway.
13. 9/3/97 Franklin Typhoon D-Mark Adds FXO
"Franklin Telecom announced today that an expanded feature Channel Bank is now in production."
"We think this is going to fill a unique niche in both the CTI and Interactive Voice Response (IVR) market. Our research indicates this is a $5 billion market."
10/2/97 Bay Networks Joins Growing List
"With the addition of FXO (Foreign Exchange Office) to the Typhoon Channel Bank with FXS (Foreign Exchange Station) configuration, it is anticipated that more manufacturers will implement Franklin's
Typhoon as part of their R&D testing facilities wherever a T-1 line is needed."
"Franklin President and CEO Frank Peters quipped, "After talking to all these companies who are using our hardware to test their own, I'm thinking of establishing a test division here at Franklin headquarters. It's highly flattering that industry giants like Bay Networks, IBM and U.S. Robotics are sold on our Typhoon."
COMMENTS: Were there any sales for the Typhoon with FXO in the 9/30/97 numbers? What other "industry giants"(IBM?) have signed contracts and for how much? Is FTEL actively persuing this $5 billion market? Was a "test division" established?
14. 10/10/96 Franklin Prepares to Launch Cyclone
"Batten down the hatches! Franklin Telecom announced today that the Franklin Cyclone, its new product developed in conjunction with StarComm Products of Huntington Beach, has completed preliminary testing and is ready for a limited-quantity Beta production run."
"The Cyclone will be marketed through Franklin's existing reseller channels and new distributors as they come on board."
4/29/97 Franklin unleashes CYCLONE
"Alan London and Sparrow Marcioni, Franklin's Sales & Marketing chiefs stated Beta deliveries will ship in early May."
3/3/97 Franklin announces expansion
"Franklin Telecom announced today that is has signed a lease to expand its headquarters in Westlake Village, California. This move is being undertaken in order to accommodate increased production demands for its hardware products."
COMMENTS: The anticipated Cyclone took a long time to get out of beta and ready for shipping. How many were shipped in May? Who were they sold to? What part of the 9/30/97 sales numbers are from Cyclone sales? Is the new production facility that was set up for Cyclones busy producing and shipping Cyclones? What are the existing reseller channels and what new distributers have come on board?
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My interpretation is that FTEL went from Frame Relay, to satellite, to ATM, and from hardware and internet application and services to now a "telephone company". My concern is what will the direction change to next year? I realize not all ideas are successful, but it seems to me that a large percentage of the FTEL press releases have not announced products and services that have ended with positive results, i.e. sales, revenue, and higher stock price!
Well, if you have gotten this far, thanks for reading through this. I definitely welcome any comments explaining something I may have missed in my interpretations.
Judith |
