FTEL's IP worldwide network and DGIV's IP Worldwide Network
Hi guys.
Over the weekend, the CEO for FTEL, Frank Peters, wrote exactly where his IP Telephony Phone-to-Phone company is.
Now FTEL has about 2-3 million more shares Outstanding than DGIV.
FTEL trades for $.90 a share. DGIV trades for $2.375.
FTEL's 52 week high is $10.50 DGIV's 52 week high is $8.00.
So, they are both similar in this way.
And... each company has its pro's and con's.
DGIV has a closer rapport with its investors.
FTEL, until this weekend, did not. FTEL spent more attention to its goal of building a worldwide IP Telephony Network.
FTEL is a fully reporting company with the SEC.
DGIV does not report financials with the SEC.
Now correct me if I am wrong, but DGIV currently to date has NO revenues through IP Telephony.
FTEL, as of September 1998, does.
I am posting the CEO's weekend statement and link here for your enjoyment.
If nothing else, you should get a sense of where DGIV might be going in the future.
But a quick question to all the DGIVites out there.
In mid-November only 5 cities in Indonesia will be linked up according to DGIV's news release...meaning intercity calling within Indonesia.
I also read the possibility of intercity calling in Russia.
When is DGIV supposed to EXPAND BEYOND regional Indonesia calls and separate regional Russian calls to linking these sites to other parts of the Pacific Rim?
Read this and see if you believe FTEL is ahead of DGIV, the same level as DGIV or behind DGIV.
I'm curious to hear anyone's thoughts.
Thank you, and Enjoy.
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ftel.com
September 18, 1998
Dear Shareholder or Franklin Visitor:
Major accomplishments have been achieved in our Tempest Product and the FNet
Telco Rollout.
Since we have not restated our corporate mission for some time now - here it is.
The Vision:
We envision Franklin building a global communications company offering System telco
and wide area network standards based products made of proprietary software and
hardware manufactured and sold by FTEL, which are extremely hard to copy and,
Telco Services provided by FNet which are unique to FNet subscribers worldwide.
1. Franklin Telecom designs and builds hardware and software for
Internet Telephony and sells it to FNet and others.
2. FNet sells telco services and is building a worldwide IP telephone
network using products from FTC and others.
The motivation is the reward of capturing a bit of the trillion dollar telecom market which
experts expect to consist of 12% Packet switched calls within the next 18 months. In
the year 2000 that bit, for us, could be $1,000,000,000 (One Billion) in revenue.
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I understand that with this tumultuous time in the marketplace, information is very
important. Given the competitive nature of our business, and the need to follow all SEC
Fairness rules, it has been difficult to disseminate anything meaningful to our
shareholders. However, I believe it is now time that we share FTEL's and FNet's
strategy with you and why we believe we are prepared to take a significant position
within the new and emerging international telecom sector.
Franklin Telecom:
The product strategy for FTEL, and in particular the Tempest System which is at the
heart of FTEL, is to make a "Complete Telco in a Rack" which can be marketed to the
literally hundreds of regional start-up telephone companies. The Tempest System will
provide them with a cost-effective one-stop shopping service that can instantly allow
them to leapfrog past their local competition by adding IP capabilities to their
companies. Their alternative is a standard telco circuit switch costing 10 to 20 times
more.
This is an example of the potential symbiotic relationship between Franklin Telecom and
FNet. Franklin Telecom benefits from the hardware sales; FNet benefits by adding
these geographic pockets to the FNet network, and in some instances possibly
absorbing the companies themselves. It is a Win-Win situation.
The Tempest System now includes three products:
The Data Voice Gateway
The AMAS
The Billing System
We are already shipping all three units as part of the Tempest "Telco in a Box". The
AMAS (Authentication, Mapping and Accounting Server) software is the most
advanced system in the Internet Telephony Industry.
The fourth and last unit is a standards-based MM2000 (Multi-Media 2000) product
which is H.323 compliant for audio and "net meeting" communications; this unit is still in
the engineering phase.
The Tempest 2.20, now available for shipment, includes fax capability. Our engineers
continue to work toward additional features which will give the Tempest extra flexibility
to fit into various work environments. Current focus is on completion of E1, for
widespread European distribution.
By the way, our Tempest also includes a feature, the "Updater", which allows it to
retrieve, install and test updates effortlessly. We believe this operation is completely
unique.
Sales of DVG's have started to head for the levels we anticipated. During July we saw
some high volume domestic shipments and quotations. I think you will pleased with our
shipments for August and September.
Tempestr DVG
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Learn more about FTEL and our 18 year history, click here.
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FNet:
As you know, FNet has been busy deploying its new international Voice over Internet
Protocol (IP or VoIP) network that will provide Internet and Intranet-based telephony
services to businesses and individuals throughout the world. Currently, we have
operational nodes in the United Kingdom, Guatemala, and Bosnia, with El Salvador,
Honduras, New Zealand, Australia, and Curacao coming on line within the next 60-120
days. In addition, we have several contracts in final negotiations (Russia, S. Africa,
Turkey, Lebanon, Syria, Italy, Philipines, China, Brazil), and hope to close these by the
end of the year when our funding has been concluded.
We have all been following the recent developments in the news regarding telecom
around the world. The reason these events are significant is that the global opportunity in
IP telephony is the result of privatization and deregulation of telecommunications
markets. In 1996, monopoly and former monopoly carriers (such as AT&T) accounted
for more than 90% of the estimated $670 billion in worldwide telecommunications
services revenues. The market is ripe for emerging multinational carriers such as FNet to
exploit the pent-up demand and high price umbrellas created by the dominant carriers.
As you can see, even a small amount of market share will develop into a multi-million
dollar business for FNet within the next few years.
The building process:
I'd like to say a little bit about the concept of a Next Generation Telephone Company,
to make sure you all understand where we are going with both FTEL and FNet.
FNet is in the process of deploying an international Voice over the Internet network that
will provide Internet and intranet-based telephony services to businesses and individuals
throughout the world. We are taking full advantage of several competitively-priced
packet-base network protocols, such as F/R, IP, and in certain cases, ATM.
Our service is unique in that we combine traditional telco procedures and products with
the latest innovative technologies. The first essential, in establishing a global telephone
company, is to make sure that you can connect a call from anywhere to anywhere. The
Harris Switch gives us this capability. The next phase is to implement the Internet
capability, since that's where the cost saving really comes into play. As you know, one
of our strategies here is to find Joint Venture partners who have solid marketing bases
within their own countries. These JV partners then carry the responsibility for licensing
and marketing concerns while we provide hardware and linkage. The capital we are
raising for FNet will go toward expediting this process. The more we deploy, the more
the revenue streams can increase.
Looking forward only a few months, IP telephony will continue to grow exponentially
due to significant cost savings that arise when compared to conventional circuit switched
networks that are currently utilized by the major carriers (AT&T, MCI, Sprint, BT,
etc.,). Based on the same transmission standard as the Internet, IP telephony converts
voice calls from analog to digital form, and then compresses the call into a packet that is
routed to its final destination through a data network. Unlike traditional circuit switched
networks that transmit voice calls through a single transmission line dedicated exclusively
to that call, packet switching maximizes the use of bandwidth by routing multiple calls on
the same line. As a result, IP networks improve the utilization of fixed bandwidth by a
factor of nearly eight to one and are 50% to 75 % more cost effective than traditional
circuit switched networks. In short, the reduced cost of the FNet network will enable us
to become cash flow breakeven much faster than most of our competition.
Unlike other carriers that provide USA-to-country and country-to-USA service, we are
focused on higher margin country-to-country service skipping the U.S. By deploying our
own IP network to facilitate long distanced transmission from one country to another,
the we are able to bypass existing settlement fees or tariffs. These fees, which can be as
high as $0.35 per minute, are charged when telephone calls are carried into a country
over conventional circuit switched lines, but are not applicable to calls transmitted via an
intranet or the Internet.
As promised, the Harris Telephone Circuit Switch which is required to interface with all
the phone companies which don't, as yet, have packet technology, has been installed
and was up and functioning shortly before our announced date of September 1.
The battery backup for the Harris Switch (which probably sounds easy to the novice)
consisted of eight thousand pounds of huge batteries which take up 25 square feet of
floor space and stand higher than I am tall (6'4"). The distribution of the power is in two
6 ft. high 19" racks.
During the testing we were doing on the switch, just for a little extra excitement, we had
a major thunder and lighting storm, including a small Tornado (almost unheard of in
southern California) which touched down about a mile from here, uprooting trees and
21 power poles which serve Franklin. The power was down for 5 hours, and we were
still a couple of days from having our batteries connected. It was OK, though, because
there was no live traffic on the system at the time. Good planning, yes? --- Bring on the
next big storm. (Actually, we prefer the storms we generate here at
Franklin--Hurricanes, Typhoons and Tempests.)
On the FNet Joint Venture side, the fruits of our efforts, will continue to become
obvious over the course of the next few weeks. Here is a current update:
Bosnia:
Eleven of the 15 earth stations are operational and averaged over 2,000 minutes per
day in August. The September run rate shows a 30% growth rate over August.
Additional sites for Turkey and Canada are under negotiation.
The FNet Debit cards are being sold now in Bosnia.
Guatemala:
Fully operational as of Sept. 1 and booking about 7,000 minutes per day.
London, UK:
The equipment has been installed and test traffic on our private lines with billing is being
tested with live Debit Cards.
El Salvador:
Our equipment has been shipped and received in El Salvador and we expect revenue
next month.
Russia:
The contracts have been signed with our "in-country partner"; we expect final approval
from the Russian Ministry of Telecom by November.
Curacao, Netherlands Antilles:
The joint venture contracts have been signed and the formal Corporate documents have
been filled in the Netherlands Antilles. The circuits and equipment have been order and
revenue is expected in December.
We believe that Franklin will gain a competitive advantage in targeted markets by
providing customers with both a full array of enhanced products from Franklin Telecom,
and services from FNet. These will include the following:
International Long Distance - including high-margin country-to-country service
Corporate Private IP Solutions
Deployment of "Tempest-in-a-Rack" product solutions to small regional telcos
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We are on uncharted ground. We are building a road into the future. There are
potholes, there are mountains and rivers to cross: we are now crossing them.
-- Frank Peters
Chairman & CEO, Franklin Telecommunications Corp.
ftel.com
-DavidCG |
