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Riverside, Calif.-Based LTV Telecom Lines Up European Phone Users

Posted on: Monday, 17 May 2004, 06:00 CDT

May 16--A 2-year-old Riverside telecommunications company in the throes of expansion is focusing on Europe and its regulatory disarray as a prime market for providing telephone and cell phone connections.

LTV Telecom Inc. is a wholesale telecommunications firm that leases data and voice lines of telephone companies and routes international calls for other telecommunications firms using LTV switching equipment housed in Los Angeles.

The startup's four employees handle several million minutes a month of traditional landline phone calls and Internet-based Voice-over-IP calls at wholesale rates that vary from a penny to 50 cents a minute. The bulk of LTV's business is routing international calls.

By mid-year, the firm expects to route 40 million to 60 million minutes a month, President Walter Jensen said.

Calls originating in the United States go to LTV's switches in Los Angeles and then on to overseas telephones along international routes for which LTV has negotiated the use.

LTV currently routes calls to Mexico, Vietnam, India, Germany, France, Russia, and the United Kingdom. The company negotiated its route to India after India deregulated its telecommunications industry a year ago and allowed outside competition, Jensen said. LTV routes traffic for India call centers terminating calls in the United States.

Europe is in regulatory flux pending the formation of European Union telecommunication industry standards and LTV is working to secure customers and handle calls in European nations before new rules take effect. The company is particularly interested in terminating phone calls from the United States with cell phone carriers in Europe and has several contracts under negotiation, Jensen said.

"We are licensed as a carrier in the United Kingdom. The United Kingdom office was going out of business and we took advantage of getting licensed under the old rules because we were uncertain what the new rules will be," Jensen said.

The international telecommunications market is expected to grow 10.3 percent in 2004 to $1.5 trillion in Canada, Mexico, Western Europe, Eastern Europe, Latin America and Asia/Pacific, according to the 2004 Telecommunications Market Review and Forecast published by the Telecommunications Industry Association in Arlington, Va. The association represents Cisco Systems Inc., Apple Computer Inc., Bechtel Telecom and other telecommunications equipment manufacturers.

Overall spending in the market is expected to surpass $2 trillion by 2007, with the wireless market reaching $574.3 billion in 2007. The landline market will grow at 3.2 percent to reach $440.6 billion in 2004 and $484.2 billion in 2007, the report said

LTV's future plans include possibly leasing sections of dark fiber paths created by large telecommunications companies that overbuilt their telephone and data networks and placing LTV's equipment at both ends to create their own routes, Jensen said.

LTV pays a monthly lease rate, per minute charge or some other sort of charge to use the telephone and data lines of the telecommunications companies that own the lines.

Jensen declined to name the telecommunications carriers with which LTV has rights to use routes, or LTV's clients. The company markets its business through telecommunications agents, trade publications and industry connections. LTV's founders are three former employees of recently bankrupt Riverside telecommunications firm Swiftcomm Inc.

While telephone line and call transmission quality varies widely between carriers around the world, LTV strives to make deals with carriers only for tier-one quality routes.

TELECOM MARKET

Predicted spending in worldwide telecommunications in 2007

Overall spending $2 trillion

Wireless $574.3 billion

Landline $484,2 billion

Equipment$328.1 billion

Services, Europe $316.3 billion

Source: Telecommunications Industry Association

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(c) 2004, The Business Press, San Bernardino, Calif. Distributed by Knight Ridder/Tribune Business News.

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