eSat Completes Reality Check

Broadband service provider eSAT Inc.
recently narrowed its operational focus in order to make its backbone in
the sky a working reality.

The satellite service divested its interest in the e-commerce firm i-xposure Inc. while completing the
acquisition of PacificNet Inc.
and its subsidiary InterWireless Inc.

PacificNet is a managed access provider of traditional Internet services,
including digital subscriber line connectivity, Web hosting services, and
high-speed collocation services.

InterWireless acts as a wireless last mile solution to deliver Internet
access and broadband fixed wireless services.

Basically the acquisitions added Internet management capabilities and last
mile wireless services to eSat’s future product mix.

Michael Palmer, eSat chief executive officer said the deals allowed the
firm to focus on building its satellite-based infrastructure and develop
its wholesale Internet transport unit.

“We achieved solid growth in revenues while effectively managing our
operating expenses in consideration of the substantial acquisition related
to PacificNet and InterWireless,” Palmer said. “The company is now in a
strong position to achieve its overall goal of becoming a leading provider
of wireless and network management solutions.”

The company is also in the process of testing its satellite systems in
Europe and Asia. By acquiring PacificNet and InterWireless, eSat bought the
brains for its satellite-fueled backbone.

Mark Basile, eSat’s chief financial officer, said that the firm needed to
build a back office that could support reselling broadband and fixed
wireless access to Internet service providers.

“The acquired services will provide us a uniform platform that can
effectively serve the growing global demand for high-speed, cost-effective
Internet access,” Basile said. “Selling services to ISPs required that we
invest in software to build a wholesale service.”

eSat also moved to patent the unique technology that links-up its
geo-synchronous satellite system designed to deliver one-hop hub
connectivity. When a single satellite can cover a broadband footprint
capable of delivering high-speed services to a continent, building each
point of linkage is no small feat.

Because eSat is a pioneer of satellite-based systems services, it’s not
entirely clear what variety of voice and data transport services its
network will be able to facilitate. Basile said that in two years 80
percent of its revenue would come from services not yet on the market.

“We’re planning on providing ‘channel casting’ as a featured service to
broadcast Internet data to specific locations and not to the general
public,” Basile said. “Beyond reselling broadband access to ISPs, we’re
also developing voice over IP and Virtual Private Network services. What
other services we will offer remains to be seen.”

The backbone in the sky will eventually be capable of delivering 80 megabit
per second upstream rates and 80 gigabit per second downstream speeds blind
to the global terrain it connects.

Palmer said that looking ahead, eSat plans to concentrate its efforts on
core competencies that include bandwidth management and wireless services.

“The technologies have been designed to seamlessly integrate together,
providing customers with a turnkey wireless and network management solution
with long haul and last mile delivery,” Palmer said.

“We believe that these segments of our business will afford us the highest
growth potential and ultimately lead us to our overall goal of becoming the
single source for global connectivity solutions,” Palmer added.

eSAT remains relatively untethered in its goal to provide secure, global

munication transport regardless of a company’s communications
infrastructure or locale.

The firm is not bound by financial restraints at the moment, having picked
up $7.5 million in another round of financing during the second quarter.
However, eSAT originally made its bid for a Nasdaq listing late last year.
Currently its over-the-counter stock price slipped below the $4 mark, which
means the company has to wait to get back on track to complete its Nasdaq bid.

eSAT contends that its revamped focus on core satellite services is just
the ticket to push its common stock bid through so it can finish building
its broadband backbone in the sky.

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