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Microcap & Penny Stocks : DIGITCOM (DGIV-OTC-bb)Information Thread -- Ignore unavailable to you. Want to Upgrade?

To: E'Lane who wrote (388)	12/31/1998 1:00:00 PM
From: Lazarus Long	Respond to of 530

DGIV visit - 12/28, part 2 Thank you E'Lane for helping me out here... gotta say I was more than a little frustrated in that I was rushing to try and get it done and then poof... no more post. Argh! As E'Lane mentioned, I used the word "contract" in parenthesis because the heading on the document is actually MOU. As has been stated many times on the thread - and Paul recently reinforced - there are varying strengths of MOU's. They can range from an agreement to get together to talk about making a deal to a legally binding document. The one I saw had figures and responsibilities delineated. Though the actual numbers were illegible, the denominations were in U.S. dollars. I asked Mr. Chin if the document was legally enforceable and he indicated it was. I think he was surprised at my question, but I was searching for a way to distinguish how much we could count on "it" happening. As to the question of confidentiality of the document... there was at least one section devoted to how the parties would treat information associated with the contract. Any public dissemination of information needs to be agreed to by both parties before it happens. That is why the document can't be faxed or reproduced and all the secrecy regarding the details! Why the secrecy, you might ask... well, beyond the cultural things that might be going on, I think that it may be because Egypt wants to keep the details from the rest of the industry. It appears that Digitcom does not have an “exclusive” contract on all long distance services... only a piece of the pie. I suspect that Egypt is in active negotiations with several other telcom's to provide long distance service. If that is the case, the secrecy has a rather standard analogy to the bidding process here in the U.S. The agreement had a section on the objectives for the relationship. Four were spelled out. Three of them were: 1) Provide lower cost service 2) Stretch the resources already in place 3) Reduce illegal minutes I did not take notes as I was reading the document... seemed a tacky thing to do... but, that's why I don't remember the 4th objective. I found that the lack of an objective relating to the enhancement of service or lowered cost to the end user very telling. Looks to me that Mr. Chin is basically offering the Egyptian telco something for nothing - at the surface. No (or very little) additional investment would be required to enhance the margin for the long distance service. The additional margin gained by using IP telephony would then be split (in predetermined percentages) between Digitcom and the national telco. It appears that the end user may end up with no immediately visible benefit. However, the document did talk later to the idea of increased usage based on a lower price. And in reality, the consumer may indeed end up with enhanced service, though it would be more of a by product of Digitcom serving ITS customer - the national telco. Responsibilities for the various costs associated with this deal were laid out, but much was unintelligible due to the document being edited. The agreement was for a term of 1 year, with an option for a second year. I won't try and speculate here as to the range of the revenues this contract is worth - IMO only, MoneyBaggs has already got us in the ballpark. Lazarus