Marketing Plan

Background

Lighting Ramp Technology (CRT) is a privately owned broadband solution provider headquartered in Tampa, FL. CRT was incorporated in 1997 by three industry pioneers with a common vision: to create innovative solutions for the communications industry and take Internet Protocol (IP) and Ethernet capabilities to the 21st century. We generate revenue through several contracts leveraging our data transfer abilities into teleconferencing and security applications, but angel investor money and management goodwill still provide a significant portion of our funding. Our employee base is very small but very knowledgeable, with multiple industry experts on board. The company's main focus is to create an advanced product family offering greater bandwidth and distance over unshielded twisted copper wire pairs (UTP). We are partnered with another private company, Phylogy Solutions, which develops complimentary technology, including a Repeater product.

Internet usage at home, work or elsewhere in rural America lags 16% behind the urban and city areas. The expense of enabling areas for Digital Subscriber Line (DSL) service or cable prohibitively increases the cost of those services in these low population density areas. Delivering data rates comparable with urban areas to rural and network fringe subscribers has always been hindered by the "last-mile" bottleneck - the connection of homes and businesses to the edge routers of Internet Service Providers (ISPs) that reside in Internet access points, leaving many rural areas with dial-up access only. The last mile bottleneck prohibits the delivery of various applications requiring higher bandwidth such as streaming video, HDTV, and gaming. CRT's broadband platform, Lightning Copper, is based on patented impedance balancing technology that allows increased signal distance and bandwidth on UTP. This allows video, voice, and data signals to be transmitted to anywhere phone lines are present.

Objective of the Plan

One of our primary goals in developing Lightning Copper was to enable the transmission of a full motion (30 frames per second) color video signal together with stereo audio over standard telephone wiring, making internet TV and teleconferencing a reality. Our new technology provides higher broadband capability of 50 megabits per second (Mbps) over distances of 36,000 feet, allowing more rural areas broadband penetration. It also provides the much needed off-ramp from data superhighways (fiber optic cables) allowing broadband capability over the "Last Mile" copper-based connection. This last mile solution could feasibly be implemented by the large telecommunication companies, but due to their high level of investment in current DSL technologies and efforts to build out their fiber backbones, they are unlikely to adopt our technologies. This leaves smaller "Mom and Pop" Customer-Oriented Internet Service Providers (CISPs) as likely end users and revenue drivers of our technology.

The distance and bandwidth provided with Lightning Copper will give CISPs the opportunity to significantly improve the quality of service available to their customers. Our solution meets the demands of the upcoming "triple play" market, namely; local and long distance phone service (VOIP), high-speed Internet service, and real-time video on demand. The downloading of pictures, movies, songs, and albums will all be dramatically improved for anyone not right next to a fiber network. This will enable CISPs to retain and possibly up-sell current clients while opening a new market opportunities with locations currently without broadband service, especially in rural areas. Therefore, the objective of this plan is to explain the environment of the small ISP, describe why this is our best market opportunity, and finally to define what our optimal method of deployment will be.

Analysis of the Situation

Market Analysis

According to a 2005 research study by Forrester Research, 63.8% of homes in the United States have access to the Internet. There are currently two forms of internet access in the United States, dial-up and broadband. The broadband industry has experienced dramatic growth over the last couple of years, and shall continue to grow as higher bandwidth services improve. According to one study, more than 20% of U.S. homes, 34.5 million households, have broadband service and that number is expected to double in the next ten years. However, penetration into rural areas continues to stay well below that of cities and suburbs. See Figure 1 for a comparison of broadband penetration in these areas for 2001-2005.

The broadband industry is categorized by a number of different technologies: cable modem, DSL, fiber, satellite, and wireless. DSL and cable modem are the most common means for broadband access in the United States, combining to account for 90% of broadband subscribers. DSL technology, which currently has about 17 million subscribers , is delivered into the home via routers over copper telephone wires. Since Lightning Copper utilizes similar routers and the same wires, current DSL systems made by various network equipment providers (NEPs) are ideal for upgrade to our system. Using Lightning Copper technology, current DSL providers would be able to use their existing infrastructure to reach more customers and increase bandwidth to existing customers.

In North America, the six leading DSL providers: SBC, Verizon Communications, BellSouth, Qwest, Sprint, and Covad; make up 92.7% of the market. The CISPs make up the additional 7.3% of the market. The CISPs have survived thus far by providing broadband service to the rural markets, which have had less revenue growth opportunities than urban and suburban centers. Furthermore, it would take time and resources for large providers to plan and scale their systems for deployment in rural areas, making even cost recovery more challenging. Harry Mitchell, a spokesman for Verizon, said, "the company is aware of the fierce demand for broadband and is trying to expand its reach to all parts of the country" but "it is sometimes too expensive to provide service to residents who often live miles away from anyone else."

Our distance advantage brings down this cost, allowing ISPs to reach greater distances than DSL and offer high-speed services to this population currently without access. With CRT's relatively small equity base and desire to retain corporate and technology ownership, our system can be deployed with relative ease into this rural market segment. NEPs license DSL technologies, integrate them into routers for directing information, and into repeaters for maintaining signal strength

...