To All - APCI News Release:
APC TELECOMMUNICATIONS ACQUIRES FAST GROWING
CANADIAN TELCO
TORONTO--(BUSINESS WIRE)--Feb. 10, 1999--APC Telecommunications Inc. (OTC BB:APCI) announced the
acquisition of APC Telecom Inc., a Canadian telephony company,
in a stock-for-stock exchange.
APC Telecommunications Inc. ("APC") is a Nevada company that
through its newly acquired subsidiary operates phone-to-phone
and PC-to-phone telecommunications, and resells long distance
service.
In the exchange, APC acquired all of the issued and outstanding
stock of APC Telecom Inc., issuing 5,000,000 shares of common
stock and 5,000,000 shares of Series A, Voting Convertible
Preferred Stock. The Series A preferred stock is convertible into
APC common stock, the number of shares issuable upon
conversion being tied to certain revenues and Internet Gateway
installation targets. As part of the acquisition, APC put in place a
strong management team capable of capitalizing on its Internet
Telephony opportunities: Larry Hunt, President and Chief Executive
Officer; Ron Crowe, Vice President of Operations; Rick Quinney,
Chief Financial Officer; and Robert G. Clarke, director.
Hunt has an extensive background in Internet development and the
financial services industry as a former executive with The Royal
Bank of Canada. APC will also benefit from the experience of
Crowe, a telecommunications industry veteran. As founder of
Metrowide Communications, which he sold in 1995, Crowe was a
pioneer in the development of flat rate long distance service and
reselling of local line service. Quinney, a Chartered Accountant
formerly a partner with KPMG, a Big-5 international public
accounting services firm, brings 25 years of financial experience to
APC Telecommunications. Quinney will be responsible for all
financial reporting requirements, tax planning and capitalization
needs for the new company. "Ron Crowe's technical knowledge of
and long experience in the Canadian telecommunications market
will be key to achieving our first major goal, developing long
distance traffic through the use of traditional long distance
telephone carriers," said Hunt. "We are now actively signing
customers and, once our customer base is established, and the
structure of the Internet Gateways across Canada has been built,
we will be in a position to enhance our margins by routing calls
over the Internet."
APC is now marketing traditional long distance telephone
services, offering its Guaranteed Lowest Rate Calling program
(GLR(TM)), utilizing it's exclusive billing software. APC analyzes its
customers' phone bills each month against the rates of the three
leading long distance service providers in Canada: Sprint Canada,
a division of CallNet (Nasdaq:CNEBS), Bell Canada
(Nasdaq:BCICF) and AT&T (NYSE:T), using APC's software.
(APC is not affiliated with Sprint Canada, Bell Canada or AT&T.)
The GLR(TM) program is a powerful tool that APC uses both to
keep customers from switching long distance service and to
market to new customers looking for lowest rates.
APC Telecommunications has entered the exciting and rapidly
growing market of Internet Telephony, the transmission of voice, fax
and data calls over the Internet, taking advantage of extremely low
Internet rates. APC routes telephone traffic onto and off of the
Internet through the use of high-speed Internet Telephony servers
known as "Gateways". The Toronto and Montreal Gateways have
been installed, and the New York Gateway will be operational later
in February. APC's Gateway servers are manufactured by award
winning NetSpeak Corp. (Nasdaq:NSPK).
APC has entered into a comprehensive Gateway co-location
agreement with PSINet (Nasdaq:PSIX), pursuant to which APC will
strategically deploy Gateways across Canada. Once these
Gateways are in operation, APC will be able to route long distance
calls over land lines or the Internet, depending on the best available
rate, increasing operating margins on its long distance business.
Internet telephone service available from many long distance
companies has been and frequently still is of low quality,
characterized by dial-up delays and poor voice quality. APC's
Internet Telephony service, however, is the same high quality as toll
calls made over land lines. "APC is providing Internet Telephony
long distance service through PSINet, which delivers an
astonishingly refined level of latency," Hunt explained, "meaning
that voice quality is extremely high and there are no dial-up delays.
APC differentiates itself from other traditional long distance
carriers by integrating its regular long distance network with
Internet Telephony, to bring both high quality and substantial
savings to its customers."
Hunt noted that: "The market for Internet telephone long distance
usage is anticipated to grow from its current level of $740 million
annually to over $60 billion annually by 2002. APC's goal is to grab
as much of that new business as possible, both intra-Canadian
business and Canada-United States traffic, and the infrastructure
to handle this business is being put into place now." He also
emphasized that "APC currently has an Internet Gateway
expansion plan throughout Canada during 1999. We expect to
have a gateway in New York installed in late February."
APC's telephone business is growing fast, with revenues
increasing at a monthly rate of approximately 40 percent since
launching in October 1998 through to January. Management
expects APC to be profitable in the second quarter of 1999 and
anticipates that revenue growth in 1999 will continue at this pace,
with total revenues for 1999 estimated at $4 million, based on the
current growth rate. APC is targeting small and medium sized
businesses and the small office/home office (SOHO) market,
through a multi-level network-marketing program. Sales agents are
being added to APC's multi-level force at a rapid rate through
weekly recruitment meetings, which have been launched in Toronto
and Montreal.
APC's growth is easily handled by a sophisticated software system
it has licensed for billing all long distance services. APC intends to
raise capital to further expand operations and to purchase
computers, servers and related equipment needed to build
additional Internet Gateways.
APC also has entered into a number of strategic alliances, which
give it a unique competitive advantage. Through a business
affiliate in the United States, APC will focus on seizing a portion of
the 3.5 billion minutes monthly of incoming long distance traffic
from the U.S. to Canada, as well as the 2.9 billion in outgoing long
distance traffic from Canada to the U.S. This alliance also provides
access to a network of Internet Gateways, which support long
distance throughout South America and Europe.
Detailed financial and other information concerning APC appears
in Standard & Poor's Corporation Records Manual and is
electronically available on the Standard & Poor's website
www.advisorinsight.com At the website, click on "Market Access
Program for OTC Bulletin Board Companies" and then click on
"APC Telecommunications, Inc."
Safe Harbor Statement: Assertions in this news release looking
forward in time involve risks and uncertainties, including risks
associated with the effect of changing economic conditions, trends
in the development of the Internet as a commercial medium and
carrier of telephony traffic, risks inherent in the long distance
telephone business, market acceptance risks, technological
development risks and other risk factors.
APC Telecommunications Inc. (OTC BB:APCI), is located at 241
Applewood Crescent, Suite 4, Vaughan, Ontario L4K 4E6,
Canada. Telephone: 877/272-1225 toll-free, fax: 905/761-9658,
email: info@apctel.com.
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