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Telkonet Inc. And GigaBeam Combine Forces to Market Broadband Service Products

Posted on: Friday, 8 April 2005, 21:00 CDT

Telkonet Inc. and GigaBeam Corp. are combining forces to better market their alternative broadband service products.

Germantown-based Telkonet will use its existing stable of resellers to marry the two companies in the minds of customers, which is meant to increase the presence of both in the marketplace, said Ronald W. Pickett, Telkonet's chief executive.

Telkonet offers customers a way to transmit high-speed broadband data over a building's existing electrical wires. That means there are no added costs for new wiring, and installation can be completed in a day rather than in weeks, Pickett said. Customers must simply plug the equipment into existing power sockets, which will transmit data even when the electricity is off, he added.

GigaBeam, of Herndon, Va., sells a wireless alternative to traditional fiber optics. The service, called WiFiber, instead sends signals through the air, said Lou Slaughter, chief executive of GigaBeam. Like Telkonet's product, this means installation is quicker and cheaper than the traditional alternatives, he said.

WiFiber is also just as fast as regular fiber optics, transmitting data at one gigabit per second, or the equivalent of 1,000 DSL lines, Slaughter said.

The key to the deal is that while both companies work in the same field, their products do not overlap, Slaughter said. GigaBeam will get a service provider's signal to the buildings, and Telkonet will transmit the data throughout the building's network.

This combination is especially convenient for older properties with multiple tenants, such as apartment buildings and offices complexes, Pickett said.

They'll refer customers to us, and we'll refer customers to them, said Slaughter.

The two companies would not discuss the details of the deal.

For evidence that the partnership can work, Pickett points to New York City, where the Trump properties are using both Telkonet's PlugPlus and GigaBeam's WiFiber.

The announcement comes on the heels of a several-month decline for Telkonet's stock. However, the drop is most likely a result of investors waiting for the company to receive its Federal Information Processing Standards, or FIPS, certification, said Edward Ching, an analyst with Rodman and Renshaw. FIPS certification is required before a company can work on a government contract.

At this point I think the stock will rally as soon as the certification is complete, Ching said.

Telkonet had revenues of $207,316 in the fourth quarter of 2004. Slaughter said GigaBeam has not yet produced any revenue because the company is just now beginning to ship its product.

Telkonet closed down 6 cents at $3.63 in light trading on Amex, and GigaBeam closed up 15 cents at $7.50 on the bulletin boards.

Source: The Daily Record (Baltimore)

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