Cyber Digital, Inc., a Winner in $84 Billion Local Switching Market Due To FCC's New Phone Policy.Business Editors/High-Tech Writers NEW YORK--(BUSINESS WIRE)--March 3, 2003 Cyber Digital to Raise, in First Round, $10 Million in Funding as Metamorphosis in Local Telephone Switching Infrastructure Investment Begins Cyber Digital, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: CYBD), announced that it is a winner in the local switching market for both voice and broadband data due to Federal Communications Commission's (FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. ) new ruling on phone policy announced February 20, 2003. As metamorphosis in local telephone switching infrastructure investment begins, Cyber Digital expects raising about $10 Million in the first round. Following is a brief summary of the key rules adopted by FCC and its impact on the four Bells (Verizon, Bellsouth, SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. and Qwest), long distance carriers (LDC LDC See: Less developed countries LDC See less developed country (LDC). ) such as AT&T, Sprint and Worldcom, competitive local exchange carriers (CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) ) such as McLeodUSA and Allegiance, and equipment supplier namely Cyber: Local Circuit (telephone) Switching - FCC requires that switching for business customers served by high-capacity loops such as T1 will no longer be unbundled; thereby access to Bell switches for voice and data by LDCs and CLECs is eliminated. The winners are Bells and Cyber. The losers are LDCs and CLECs as they have to rapidly build their local switching facilities, presumably pre·sum·a·ble adj. That can be presumed or taken for granted; reasonable as a supposition: presumable causes of the disaster. using Cyber switches which are ideal for business segment market. Cyber believes that it can rapidly enter this market in some 100 metropolitan service areas (MSA (Metropolitan Service Area) An urban area with at least 50,000 people plus surrounding counties. There are 306 MSAs and 428 RSAs (rural service areas) in the U.S. MSAs and RSAs are used to allocate cellular licenses. ). Cyber believes that it is one of a very few, if not the only, company in the world with proprietary technology of distributed digital switching for this market. The business segment market is about $84 billion (70% of total $120 billion). Packet (Broadband) Switching - FCC rules that Bells are not required to unbundle packet switching, including routers and DSLAMs. The winners are Bells and Cyber. The losers are CLECs providing DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary , frame-relay and packet (broadband) service. The CLECs have to rapidly build their local packet (broadband) switching facilities, presumably using Cyber's low cost CIAN routers. This market is probably about $10 billion. Line Sharing - FCC rules that Bells are not required to share line as an unbundled network element Unbundled Network Elements (UNE) are a requirement mandated by the United States Telecommunications Act of 1996. They are the parts of the telecommunications network that the incumbent local exchange carriers (ILECs) are required to offer on an unbundled basis. . The winners are Bells and Cyber. The losers are CLECs as they have to acquire access to the entire stand-alone copper loop and build their switching facilities rapidly, presumably using Cyber equipment. Mass-Market Loops - FCC rules that Bells must continue to provide unbundled access to copper loops for mass-market customers, defined as small businesses and residential customers. State Public Utility Commissions (PUC (Public Utility Commission) A regulatory body in every state in the U.S. that governs public utilities within its jurisdiction such as electricity, gas, oil, sewer, water, transportation and telephone service. Some states call it the Public Service Commission (PSC). ) are responsible for determining whether access to Bell switches by CLECs and LDCs should continue or not on a market-by-market basis. Upon a state PUC determining access to Bell switches discontinue, the FCC sets forth a 3-year period for CLECs and LDCs to transition off of the Bell switches. Short-term winners are CLECs and LDCs. Short-term losers are Bells. Long-term winners are Bells and Cyber, as this market will open up after three years. Fiber-to-the-Home (FTTH (Fiber To The Home) See FTTP. ) Loops - FCC requires no unbundling A regulatory requirement that enables a competing service provider to purchase parts of the incumbent local exchange carrier's network in order to provide service to its customers. See ILEC. of FTTH loops. The winners are Bells; not Cyber's market. FCC Chairman, Mr. Michael Powell stated, "The switch (such as Cyber's switch) is the brains of one's network and to be without one is to be a competitor (CLEC or LDC) on life support fed by a hostile host (Bells)." "For the first time in our history, market opens for our digital voice switches. We believe that metamorphosis in local telephone switching infrastructure investment is beginning and will support our growth for the next ten years. Combined power of Cyber's digital voice switches and broadband IP systems offers CLECs and LDCs affordable one-stop solution. Our strategy is to market early and make profits. We expect raising about $10 million in the first round shortly through the issuance of long-term convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". or debentures and accompanying warrants. There may be heavy dilution due to our current low share price. However, I believe that our on-going rewards of being a significant player in the upcoming metamorphosis in local telephone switching and broadband markets will out weigh concerns of dilution," said J.C. Chatpar, Chairman. Furthermore, Chatpar said, "We are confident that we will supply $80 million of our digital switches to the Nigerian customers in 2003 and 2004 without requiring any additional capital for this market." About Cyber Digital, Inc. Cyber Digital, Inc., is a leading manufacturer and software developer of advanced digital voice switches and Internet Protocol (IP) systems for network operators worldwide. Website is www.cyberdigitalinc.com This press release contains forward-looking statements, pursuant to the "safe harbor" provisions as fully described in Cyber's SEC filings. |
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