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Brazil Telecommunications -- Progress Report 1
Business Wire - July 22, 1998 09:15
LOS ANGELES--(BUSINESS WIRE)--July 22, 1998--Howard A. Foote, President and CEO of Platforms International Corporation (OTC BB:PLFM) announced that negotiations in Brazil are progressing "very nicely."
"Due to the lengthy time it has taken us to reach our current position," stated Foote, "there has been much public conjecture and speculation as to the nature and state of our activities in Brazil. Frankly, prior to this time, we were not in a position to make any significant announcements about developments in Brazil because we were dealing with a fluid and constantly changing situation. Now, with the approaching auction scheduled to take place on July 29th, under which eight cellular and three land-line telecommunications companies will be privatized in a historic public sale at the Rio de Janeiro Bolsa de Valores, things are stabilizing, our strategic positioning is in place, and we can let everyone know about our accomplishments through several press releases scheduled for publication over the next two weeks. This press release is intended to explain and clarify the nature and structure of the Airborne Relay Communications System ("ARCS") "Strategic Business Model." This Model is currently being used as the baseline blueprint for negotiating and structuring Joint Venture Partnership Agreements with some of the leading auction participants."
PLATFORMS INTERNATIONAL CORPORATION TELECOMMUNICATIONS DIVISION STRATEGIC BUSINESS MODEL
The Strategic Business Model for Platforms International Corporation's Airborne Relay Communications System ("ARCS") delineated below, presents a baseline blueprint for the development and formulation of ARC System Joint Venture Agreements.
1. THE OFFERING:
A Joint Venture Program Offering -- a non-exclusive, renewable five (5) year License to use the Platforms International Corporation Airborne Relay Communication System ("ARCS") as a cellular telephone relay station, and a cost-effective, rapid-deployment alternative to the costly satellite constellations and ground-based towers currently used to support wireless communication networks.
2. LICENSE TERM:
The ARC System License Term is five (5) years. It is renewable at the customer's option for additional five-year terms, as required.
3. LICENSE FEES:
The ARCS License Fee for the first five-year term is Five (USD $5.00) dollars per cellular telephone line per year, based on the line capacity of the ARC System. The initial ARC System will have a cellular service capacity of 200,000 lines. The License Fee for that system will be one million (USD $1,000,000) dollars per year, or a total of five million (USD $5,000,000) dollars for the five-year License Term, payable upon execution of the ARC System Joint Venture Agreement.
4. LICENSE RENEWAL FEES:
The ARC System License Fee for the second five-year term shall be the same as the Initial License, or five (USD $5.00) dollars per line, per year. Renewals beyond the second five-year term shall be subject to re-negotiation.
5. ARC SYSTEM INSTALLATION FEES:
The initial ARC System Installation Fees are as follows:
-- AA Certified Aircraft (3) USD $ N/C
-- PIC ARC System Ground Command N/C & Control Station
-- PIC System Communications Payload: RF Antennas, Repeaters, Relays, Power Supply, and Airborne Switching System N/C
-- ARC System installation and integration with Land Line, including Switching Sub-station, Power Supply, and Microwave Receiver USD $18,500,000
N/C -- All ARC System aircraft and telecommunications equipment is property of Platforms. Aircraft and equipment is offered to customer under a Non-exclusive License leasing arrangement.
6. TOTAL ARC SYSTEM LICENSE AND INSTALLATION FEES:
The total ARC System License and Installation Fees are as follows: -- Non-exclusive, renewable five (5) year ARC System License Fees USD $ 5,000,000
-- ARC System Installation and Integration Fees $18,500,000
TOTAL License and System Installation Fees USD $23,500,000
7. PIC AIR VEHICLE INFORMATION:
The PIC Air Vehicle that carries the ARC System cellular telephone relay station is based on a commercially available air frame, certified by the FAA. The engine is turbo charged and operational for at least 2,000 hours. The wing span is 75 feet. The aircraft can operate at 60,000 feet, and cruise at over 150 knots. Average fuel consumption during a mission: climb, on-station orbit, and descent is 7 gallons per hour.
8. PROGRAM IMPLEMENTATION
Following execution of the ARCS Joint Venture Agreement, and the payment of applicable License and System Installation Fees, the ARC System will be implemented in two stages:
a) Stage-I is implemented and brought to operational status in a period of four to five months, using manned PIC Air Vehicles certified by the FAA.
b) Stage-II is implemented and brought to operational status, six to eight months later. Stage II uses the same PIC Air Vehicles used in Stage-I, however, in Stage-II the PIC Air Vehicles are unmanned, with avionics controlled from a ground- based command and control station.
9. OPERATIONAL RESPONSIBILITIES:
Under the terms of the Joint Venture Agreement, Platforms International Corporation shall be responsible, at its own cost and expense, for operating, maintaining, and servicing the PIC Air Vehicles and the ground-based command and control station. The Telecommunications company shall be responsible for operating the business infrastructure required to support the airborne cellular telephone service enterprise, including business operations, marketing and sales, client billing, collections, and all required administrative support and business development functions.
10. REVENUE SHARING OPTIONS:
Under the proposed ARCS Joint Venture Program for Brazlian Telecommunications Companies, ARC System Cellular Telephone System Gross Revenues can be shared as follows:
10.1 Option 1:
a) Platforms International Corporation receives a monthly fee equivalent to one hundred percent of the ARC System Cellular Telephone Monthly Subscriber Fees, based on the full operational capacity of the System; i.e. an ARC System with a 200,000 cellular telephone line capacity requires a monthly fee of 200,000 X Monthly Subscriber Fee (USD $50.00) = USD $10 million, or USD $120 million per year. Proposed Contract Value: USD $600 million.
b) The Telecommunications company receives one hundred percent of the telephone service and toll charge revenues.
10.2 Option 2:
a) Platforms International and the Telecommunications Company share all revenues and operational expenses on a 50/50 basis. The Revenue Sharing method to be used is at the election of the Telecommunications Service Provider.
NOTE: The Monthly Subscriber Fee for ARC System cellular telephone services shall be set at highly competitive rates to attract the maximum possible number of subscribers. A Monthly Subscriber rate of $50.00 per cellular line is proposed.
11. ARC SYSTEM CELLULAR TELEPHONE SERVICE CAPACITY:
The initial Cellular Telephone Service Capacity of a single ARC System Air Vehicle is presently approximately 200,000 lines. It is anticipated service capacity will be expanded to one million lines plus in the next 12 months.
12. CREDIT AND FINANCING ACCOMMODATIONS:
In the event a Brazilian Telecommunications company requires financial assistance to acquire the ARC System License and implement an airborne cellular service program, upon substantiation of credit capacity, Platforms International and its International Financing Consortium Partner can arrange one hundred percent financing of the entire program at competitive terms and interest rates.
SAFE HARBOR ACT DISCLAIMER:
The forward-looking statements in this release involve risks and uncertainties, including, but not limited to the successful completion of the project discussed. Successful completion of the project is subject to a number of uncertainties and unforeseen events, and there can be no assurance that the goals of the company stated herein may be realized in the time frame discussed. Forward-looking statements represent the company's beliefs and expectations concerning future events, including future sales of its products and services. These forward-looking statements are qualified by important risk factors that could materially impact the company's business and its ability to complete the projects it has undertaken.
CONTACT: InterMedia Marketing Corp.
Michael Iorlano, 818/981-9031
Platforms International's Web site:
www.platforms-intl.com
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