|Teleconnect Inc. announced today that it has successfully completed the testing of its new VoIP network equipment which will be deployed during March 2006|
Teleconnect Inc. President, Gustavo Gomez explains, "In our strive to continuously improve our service and reduce as much as possible all operating costs, we are implementing VoIP in our network to decrease our transmission costs by an additional three percent (3%). This solution has been tested in our network the last two months with excellent results."
Teleconnect Inc is set to launch new product and services in Spain as well as in other European countries. The past three years have been spent restructuring the company and developing new distribution channels as well as new products and services to take the company from its actual sales levels of 5M€ in 2005 to over 20M€ sales by the end of 2007 with a net income after tax of over 2.5M€.
As part of its strategy for growth, the Company is focusing on high margin lines of business as well as develop the new products and services leaning towards functionality for the mobile market. Besides developing a solution so that mobile users from any operator can dial internationally through the Teleconnect network from any European country, the company is being positioned to become a Virtual Mobile Operator in Spain and have its own mobile users by 2007.
As a first step, and as part of the growth strategy, Teleconnect has identified a first potential acquisition related to the mobile telephony market, which will immediately bring bottom-line profit to Teleconnect. The intention is to build a Virtual Mobile Operator which can offer value-added services to its mobile users. These services include but are not limited to: mobile repairs, mobile exchange, mobile content (logos, ringtones, music, etc) as well as gaming via UMTS and of course very low cost international calling. The following step would be the integration with commerce applications for mobile where a user could prepay any service he could purchase through the network.
Teleconnect today is looking for investment funding such that it can:
• grow the existing business through more distribution and marketing
• launch the new products and services already developed
• finish the development of other new projects
• obtain the Virtual Mobile Operator License as soon as possible
• expand its services to other European countries
• formalize a Letter of Intent to do an acquisition
• reach breakeven during this fiscal 2006 year (ending September 2006)
The priority of the above actions and the number of which may be executed in parallel will be determined by the amount of funds available for investing in growing the business.
Renewed Vision and Strategy
The prepaid telecommunications market in Spain is an attractive market due to the growing immigrant population, the increase in foreign residents (other Europeans) and the number of tourists which visit Spain every year. During July and August, vacation months, the population in Spain of 43 million people is more than doubled. Given this, the prepaid card market is extremely competitive and as such the margins are continuously being pressured. For this reason, and thinking about the long-term profitability of the Company, Teleconnect management firmly believes that the Company needs to move into telecom services which complement the existing business but which have much more attractive margins. Such is the case with mobile-based services.
In addition, the Company has the technical expertise to create its own developments and produce the necessary software for the new functionality requirements requested by the market. Teleconnect will invest in R&D as well as search for the best technologies existing in the market in order to customize them to our business model and our market.
It is also management's objective to grow quickly through acquisitions which can complement the strategy by bringing in mobile-based value added services or VoIP transport equipment and/or service.
The SG&A will continue to be a focus of attention as it influences directly on the bottom line.
Products and Services
The Company is presently providing prepaid voice telephone services to its customers through prepaid calling cards as well as prepaid residential and small business accounts. The Company offers various types of calling cards to its customers. Prepaid calling cards are used primarily by tourists, students, and immigrants. They are purchased from a variety of local merchants, kiosks, etc. These are cost effective and can be used from hotels, pay phones, public and/or any private telephone. Below is an example of the most popular rechargeable card:
The prepaid accounts work the same as prepaid calling cards except for the fact that Teleconnect's network recognizes the caller's “line identification”, so a PIN is not needed, which is more convenient for the user than using a calling card. Customers can recharge their balance manually or automatically. Traffic from the prepaid accounts goes directly through our network, the same as with prepaid calling cards.
Teleconnect has reached a distribution agreement with the manufacturer of a mobile plug such that Teleconnect can now market to its client base a new solution to dial internationally using a mobile phone but with fixed-line costs. This simple calling card interface for mobile phones directly increases calling card usage and revenue from mobile users.
S-Plug enables mobile users to place calling card calls directly from their mobile address book or memory, seamlessly diverting calls through to the calling card service. Subscribers realize reduced-rate calling card service without cumbersome dialing procedures.
In addition to providing simplified dialing, S-Plug also functions as an "intelligent calling card” that can be recharged with additional credit. It fits most mobile handsets including Nokia, Samsung, LG, Motorola, Sony Ericsson and Siemens.
This could be a company that is very much in the right place at the right time!