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Technology Stocks : EFAX.com - easy-to-use fax-to-email technology -- Ignore unavailable to you. Want to Upgrade?

To: Steve Turner who wrote (854)	3/26/1999 11:45:00 AM
From: wonk	Respond to of 1197

Steve, Rajiv, Christian et al: I believe the board is confusing phone numbers with lines. In this scenario, they are two separate things. The company will have to procure a phone number for each subscriber. It does not need a line for each subscriber. The number of lines necessary is a pretty straight-forward exercise in telephone traffic engineering. To calculate the number of lines: 1. Estimate the length of the fax transmission each subscriber will make in the busiest hour of the day; 2. Convert the minutes to Erlangs (divide the transmission length by the number of minutes in an hour, i.e., 5/60 = .083 Erlangs), total the Erlangs; 3. Use a probability formula to determine the number of lines necessary to support all those transmissions given a specified percentage of users who would be blocked from completing the call (receive a busy signal). A simplistic example: 1. Assume the busiest hour in a 24 hour period is 4-5 PM eastern time on a regular business day; 2. Each subscriber will receive 1 fax of 5 minutes duration during that hour; 3. There are 1,000 subscribers; 4. Erlangs in the busy hour per sub = .083, total Erlangs in the busy hour for 1,000 subs = 83.3 5. Assume that you want no more than a 2% chance that an attempted fax will receive a busy signal: using a Poisson distribution (one can find the function in Lotus 123 or Excel), the required number of lines would be 95. From the phone company switch (Central Office) there would be 95 lines connecting this switch to EFAX's premise equipment. These line would be configured as a "full availability trunked group," i.e., if one line was in use the call would be automatically "rolled-over" to the next available line. The actual cost per business access line is probably more on the order of $45 per month. Using the $0.15 per phone number per month figure (I have not researched it recently) and the aforementioned line cost, the expense per month would be approximately $4,400 in my example. Let me reiterate that -- given my assumed parameters - this expense supports 5,000 minutes of fax traffic in the busiest hour in a single business day, not the total amount of fax traffic which these lines could support during a month, which would be much greater. Also, if not every subscriber receives a fax in that busy hour, then the number of lines needed, drops. Of course, one would have to also determine both the capital equipment the company needs to install to support that level of traffic as well as the other operating expenses before one can get a clearer insight into the business model. My personal disclaimer, I have not kept up with the charges for phone numbers (one time fee versus recurring charges) so I cannot comment on whether the $0.15 per number per month is accurate. However, there is a mad scramble for telephone numbers and my concern would be the readily available supply of those numbers. ww