Company Overview
Babtel is a converged communications service provider focused on the substantially underserved markets of Iraq and its surrounding region. We commenced Wimax operations in Baghdad in 2004, serving foreign contractors and government entities. In early 2008 Babtel received US and Iraqi permission to expand its services to Joint Base Balad, the largest US military base in the region; this service will commence operations in July 2008. Several other large bases are in discussion with Babtel for similar services. Finally, Babtel will erect a microwave communications system from its areas of operations that will provide Iraq with its first country-wide network.
Predominantly, we offer international voice connectivity through two main types of services: Enterprise Telephony Services to Iraqi, Middle Eastern and multinational companies, governmental entities, and other service providers; and Coinless Phone Booth Services which we sell to laborers living on contractor camps at nine of the largest US military bases in Iraq ("Third Country Nationals" or "TCNs"). Our initial efforts were focused on filling some of the most difficult niches in the soaring market for international communications services from contractors working in Iraq, with the future goals of establishing our own Metropolitan Area Networks ("MANs"), and then connecting them with 'core' fiber and microwave architecture within the crippled Iraqi infrastructure, finally making Babtel a dominant participant in the Iraqi mobile WiFi telecommunications industry.
Upon our founding in September 2004 we immediately established operations in Iraq, commissioning our first customer, Agility Logistics (then known as PWC Logistics, "Agility") for whom we built out a 40-telephone Voice over Internet Protocol ("VoIP") network connecting their 24 remote offices in Iraq to their headquarters in Kuwait. Since then, we have grown our customer base to a total of 20 enterprises. In June 2005, realizing the rapidly increasing demand for low cost effective telephony for contractors working on military bases, we established our coinless phone booth business to secure an additional source of cash flows. Today we own and operate approximately 75 phone booths at 18 contractor locations on 9 military installations. Despite the ongoing unrest, we continue to expand our core business.
On January 23, 2008, we signed a four-year contract (Contract #ATI-07-058-07-019) with the Army & Air Force Exchange Services ("AAFES") to be the effectively exclusive internet service provider to the soldiers and contractors on Balad. Our service will provide VoIP telephony and internet services via WiFi connection to the more than 31,000 military and civilian personnel on the base at a considerably lower cost and at much greater convenience than services presently available. The project is currently under construction, and we are on schedule to launch beta service in July of this year. The net proceeds of this Placement will provide the funds necessary to complete the launch of the service.
The key issue debilitating Iraqi telecommunications has been the lack of reliable terrestrial infrastructure, which has forced all the providers to resign to costly if not cost-prohibitive satellite based technologies. Over the past four years, we have been working towards establishing a more viable alternative to this problem. As the first step towards this goal, we established our first Metropolitan Area Network (MAN) in Baghdad City in 2004 with pre-certified WiMAX technology that broadcasts from our own Network Operations Center ("NOC") at the 10th floor of the Al-Hamra Hotel in Jaddriyah, Baghdad. Within our WiMAX architecture, we have successfully integrated a number of technological solutions, including long range WiFi telephony and data bridges, virtual PBXs and VoIP telephony that connect our customers to the rest of the world through a single gateway at our NOC. Although we still use VSATs to access the international telecommunications network, this centralized approach combined with Babtel's customer support, provides our customers a full range of easy to use telecommunications without having to invest money in satellite equipment and incurring the ongoing costs of recruiting, protecting and paying their own in-house technical staff. We are currently working on addressing the biggest remaining issue, which is the lack of terrestrial connection between our initial MAN in Baghdad and our new MAN at Joint Base Balad with the worldwide fiber optic network.
Our principal executive offices are located in the United States at 363 Lincoln Highway, Suite 200, Exton, Pennsylvania 19341. Tel. (610) 524-1613.
