There are two telecom IPOs on deck for this week: Netural Tandem Inc (TNDM) an American company that provides Provides tandem interconnection services to telecommunications carriers; and 012 Smile.Communications Ltd. (SMLC) an Israeli provider of broadband and voice services to businesses and individual customers.
All quotations are from the companies' most recent S-1 filings with links provided.
NEUTRAL TANDEM INC. (TNDM)
Business Overview (from prospectus)
We provide tandem interconnection services principally to competitive carriers, including wireless, wireline, cable telephony and Voice over Internet Protocol, or VoIP, companies. Competitive carriers use tandem switches to interconnect and exchange traffic between their networks without the need to establish direct switch-to-switch connections. Prior to the introduction of our service, the primary method for competitive carriers to exchange traffic was through the use of the incumbent local exchange carriers’, or ILECs, tandem switches. Under certain interpretations of the Telecommunications Act of 1996, ILECs are required to provide tandem switching to competitive carriers. For tandem transit services, ILECs generally set per minute rates and other charges according to mandated rate schedules (including varying rates) set by state public utility commissions. Our solution enables competitive carriers to exchange traffic between their networks without using an ILEC tandem.
Offering: 6.7 million shares at $11.00 - $13.00 per share. Net proceeds of approximately $67,350,000 will be used the net proceeds will be used for working capital, capital expenditures and general corporate purposes.
Lead Underwriters:Morgan Stanley, CIBC World Markets
Revenue increased from $28.0 million in the year ended December 31, 2005 to $52.9 million in the year ended December 31, 2006, or an increase of 89.1%... Operating expenses increased from $27.1 million in the year ended December 31, 2005 to $47.4 million in the year ended December 31, 2006, or 96.9% and 89.6% of revenue, respectively... Network and facilities expenses increased from $11.3 million in the year ended December 31, 2005, or 40.6% of revenue, to $21.3 million in the year ended December 31, 2006, or 40.3% of revenue... Sales and marketing expense increased from $1.4 million in the year ended December 31, 2005, or 4.9% of revenue, to $1.6 million in the year ended December 31, 2006, or 3.0% of revenue.
- Company website
- Online road show
- Communications Daily: 'Neutral Tandem Says Level 3 Cannot Deny It Interconnection'
We are a growth-oriented communication services provider in Israel with a leading market position, offering a wide range of broadband and traditional voice services. Our broadband services include broadband Internet access with a suite of value-added services, specialized data services and server hosting, as well as new innovative services such as local telephony via voice over broadband, or VoB, and a WiFi network of hotspots across Israel. Our traditional voice services include outgoing and incoming international telephony, hubbing, roaming and signaling and calling card services. As a growth-oriented company, we continually focus on introducing new broadband services that allow us to expand our penetration into the communication market segments in which we currently operate, as well as access new market segments such as the large Israeli local telephony and mobile markets. We have frequently been a leader in our industry in introducing new, innovative services and are the first company in Israel to provide VoB services and are the first to be granted a license to provide WiMAX-based services on a trial basis.
Offering: 6.7 million shares at $14.00 - $16.00 per share. Net proceeds of approximately $91.3 million will be used for general corporate purposes, including working capital, and to repay short-term debt.
Lead Underwriters: CIBC World Markets, Cowen & Company
Our revenues increased by 40.4% from NIS 244.4 million for the year ended December 31, 2005 to NIS 343.1 million ($80.7 million) for the year ended December 31, 2006... Our cost of revenues increased by 64.1% from NIS 136.9 million for the year ended December 31, 2005 to NIS 224.6 million ($52.9 million) for the year ended December 31, 2006... Our selling and marketing expenses decreased by 1.2% from NIS 60.6 million for the year ended December 31, 2005 to NIS 59.9 million ($15.1 million) for the year ended December 31, 2006... Our income from operations increased by 6.2% from NIS 24.1 million for the year ended December 31, 2005 to NIS 25.5 million ($6.0 million) for the year ended December 31, 2006.