C-COM Satellite Systems, Inc. (CMI)
Interview with:
Leslie Klein, Ph.D.,P.Eng, President and CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
mobile satellite-based technology for the delivery of two-way high-speed Internet services into vehicles.

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C-COM Satellite Systems has developed a unique fully automatic mobile solution that allows high-speed two-way satellite based Internet into vehicles practically anywhere in the world

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Mobile Satellite

C-COM Satellite Systems, Inc.

2574 Sheffield Road
Ottawa, ON K1B 3V7
Phone: 613-745-4110 ext. 4950

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Leslie Klein, Ph.D.,P.Eng
President and CEO

Interview conducted by:
Lynn Fosse
Senior Editor

August 2004

Company Profile:
C-COM Satellite Systems, Inc. is a Canadian publicly traded company (TSXV: CMI) and a leader in the development, manufacturing and deployment of mobile satellite-based technology for the delivery of two-way high-speed Internet services into vehicles. C-COM has developed a unique proprietary Mobile self-pointing (iNetVu™) antenna that allows the delivery of high-speed satellite based Internet services into vehicles (while stationary), virtually anywhere where one can drive. The iNetVu Mobile has been deployed with Direcway, iDirect, Gilat and StarBand modems and is being continually enhanced to work with other service providers modems. The company's satellite-based products and services deliver high-quality, cost-effective solutions for both fixed and mobile applications throughout Canada, the United States, the Caribbean, Europe, Australia, Mexico, Latin America and the Middle East.

CEOCFOinterviews: Mr. Klein, will you tell us about your background with C-COM?

Mr. Klein: “I started C-COM with a couple of other engineers in 1997 to develop high-speed internet over satellite into vehicles. I am an electrical  (professional) engineer with an MBA and a PhD. I have worked for some notable corporations in the past such as Hewlett Packard (NYSE: HPQ), IBM (NYSE: IBM), Control Data Corporation, and Bell Northern Research, which is now part of Nortel Networks. I have personally been involved in the high-tech business over the last 24 years and successfully ran a number of companies in the computer third party maintenance business; one is still active and profitable after 24 years in business. In 1997, I have decided to invest with a couple of people into an idea, which was an idea on paper only. We knew that satellite technology would be available within years, which would allow for delivery of high-speed Internet into vehicles. The pervasiveness of the Internet was such that we knew that seven or ten years down the road that the Internet would have the same impact for many people as the cell phone business had fifteen years ago.

In 1999, before the advent of low cost 2 way high speed satellite Internet services we demonstrated our fully mobile two-way high-speed internet capability, using high-speed antennas designed to deliver one way satellite television. Not having available a low cost return link satellite capability, we used cell and satellite phones. While the solution worked and we were able to demonstrate full Internet access while driving down the road at 60 miles per hour, the costs and speeds of the satellite and cell phones were not a viable solution, although two of the US companies we demonstrated this technology have adapted it and are selling it today (with limited success I may say as the cell and sat phone upload speeds do not even compare to the speeds of dialup which as we know today are not nearly adequate for broadband.). We knew that in order for this technology to become a sellable commodity we needed to team up with a service provider offering low cost 2 way high speed satellite based Internet services and that it would be only a matter of time before these companies materialized.

In 2000, C-COM went public and raised some additional funds. Shortly after that, Hughes Network Systems, Inc. (HNS) (a subsidiary of The DIRECTV Group, Inc.) announced one of the first high-speed two-way Internet connection services, which provided us the opportunity to become a Value Added reseller of HNS and work hand in hand with them to modify the existing proven design we had that has been sitting and waiting around for the right technology to come around for it. In 2001 C-COM launched the first HNS based two-way high speed Internet service in Canada for fixed and mobile subscribers.

In May of 2003 our first iNetVu Mobile systems started shipping worldwide to Hughes based customers. A year later the same systems are now used by iDirect, Gilat and Starband customers as well world wide. We are continuing to develop the mobile solution that allows high-speed two-way internet into vehicles practically anywhere in the world using virtually any providers modems and services. The same platform and software supports all of the above applications and we intend to make it universal for many more service providers world wide in the coming month. Today, C-COM has combined 1,500 subscribers from around the world that is generating monthly recurring revenues for the company.”

CEOCFOinterviews: Who is using internet in their vehicle?

Mr. Klein: “You would be surprised how many different applications there are. We have customers from the Minnesota State Police, that use them in their vehicles to deliver high-speed internet at the side of the road when they are looking for vehicle license registrations in areas where there is no communication of any kind and you would be surprised how mnany spots like that are even in the heavily wired countries like Canada and the US. It is useful in the cases of forest fires, and people use it to transmit images from remote locations to doctors from Emergency Medical technicians. We have bookmobiles that use it in remote areas of the United States. We have metro television stations that use it to transmit pictures from different locations. In Canada, there was an election here a month ago, where the parties had the system in their busses so that they could communicate regardless of where they stopped, because in many locations there would have been no way for them to browse the net or send and receive emails. We have oil and gas companies in Northern Canada, South America and Mexico drilling for oil, and move every week to a different locations. We have oil platforms along the oceans that need to occasionally move the antennas rapidly from one place to another.

The units are also ideal for an emergency backup solution in case of complete failure of communication as these work directly from a car battery and as long as you have power in your car you can have high speed Internet connection and even Voice over IP capability right form your vehicle. There are many Recreational Vehicle users, Railroad maintenance crews, Saudi oil fields, Iraqi, Dubai and Kuwaiti security and service companies, border patrol (both US and Canada), FBI.  We have the Colorado State Prison, who is using it in their outdoor mobile system in case there is a break-out from the prison. There are over 25 fire trucks in the United Kingdom and a number of them in Canada that are equipped with the iNetVu Mobile which gives them instant access when fighting a fire in locations where no other communication is available. Even if there is cell coverage available, the present cell phone speed rates are such that it makes it impossible to surf the net at the speeds available via satellite.”

CEOCFOinterviews: Is it because it is satellite based that it can be used everywhere?

Mr. Klein: “Yes, that is correct.”

CEOCFOinterviews: What is it that you are actually giving people?

Mr. Klein: “People would buy an antenna that is eleven inches high when it is folded down and fits on top of the vehicle. The laptop is connected to the control box that drives the antenna system. You click on an icon on your laptop that says “find satellite” and this mobile robotic platform commands the antenna system to unfold itself and automatically locate the satellite and deliver Internet access right inside your vehicles laptop, the same way you would connect to your network at the office. There is very little knowledge required. When you have finished your communication, you click another button, (Stow the Dish) and it goes back to its stowed position and you can drive away.”

CEOCFOinterviews: Are you selling them the antenna or the monthly service?

Mr. Klein: “We sell both. We have customers that only buy the antennas from us. For example, we have a telephone company in Australia that only buys the mobile platform from us; they have their own antenna and they collect the revenue for the airtime, from their customers. In North America, we offer the hardware and the service as well as the 24/7 technical support.”

CEOCFOinterviews: Is there much competition?

Mr. Klein: “There is not much competition in this price range for the product because we have one of the most advanced systems in the world today and we are the only company that provides a turnkey solution capable of delivering the iNetVu Mobile to a number of different modem manufacturers. In other words, if you buy from us we will sell you the antenna, robotic platform, the service and support. In that respect, there is no competition. There are more expensive units on the market that are less effective as they operate in a semi-automatic mode and do not have the intelligence of the iNetVu Mobile to be able to work with many different modem vendors in a fully automated mode. We have also designed the units to make them easy to use and affordable with the idea of selling many thousands of them.”

CEOCFOinterviews: How do you reach potential customers?

Mr. Klein: “We actually work with a number of very large satellite providers; one of them is Hughes Network Systems in the U.S., as well as StarBand Communications Inc., Telesat in Canada and Ericsson in Australia just to name a few. We also work directly with many telephone companies and other smaller and larger satellite service providers worldwide. We have distributors in the Middle East, Europe, Australia, North America, and Latin America.   Many of the satellite service providers are our direct customers and they resell the service. It is easy for us to distribute the product because most of the satellite service providers and the resellers see an added value in this potentially very large an lucrative niche market. Most of our customers are resellers and distributors there is not much direct selling to end-users.”

CEOCFOinterviews: Do you have any other costs?

Mr. Klein: “The system sells for about six thousand dollars U.S. There is a lot of know how that goes into it. The antenna is a standard off the shelf product that we source form the antenna manufacturers or service providers. The robotic platform is manufactured in Canada, we design and develop the controller and write the software for it and integrate it with the satellite service provider’s modems with their cooperation. This makes our product unique form all others as our technology is interwoven with the modem manufacturer product who finally tests it and approves it for sale. We work hand in hand with them to sell and support it as both of our good names are on the line and we want a happy customer without having to go through finger pointing at any stage. The final product is a complicated robotic technology that is simple to install and easy to operate but there is a lot of smarts behind it.”

CEOCFOinterviews: Are you concerned about a new technology that could replace yours?

Mr. Klein: “There isn’t one single item that comprises the whole technology solution.  It would be difficult for one company to come up with a new technology and then obsolete our technology. In order for our technology to be made obsolete, there are five or six things that would have to simultaneously take place. First, a new satellite would have to be put into orbit that offers higher speeds with newer technology at lower than existing service rates. Secondly, there would have to be new satellite antenna technology together with new modems, thirdly, some sort of service provider that adopts the technology and starts selling it, and then there would have to be somebody that puts it altogether and makes it available. In order for something like this to leap forward and advance, there are many elements, that have to happen at the same time, and this is not possible. It is an evolutionary process rather than a revolutionary process. It is not possible for somebody to leap frog this overnight because it is complex and requires to many parameters, which has to be assembled by a system integrator such as ourselves. We tend to work with the companies working on new technology and we are part of the solution as it is in their best interest that once the new fixed service is available the mobile service is also available at the same time. We are staying ahead of the game with them and are making sure we are there whenever the new technology materializes”

CEOCFOinterviews: So then the idea is to be on the look out for new technology to enhance what you do.

Mr. Klein: “We are desperately waiting for some new magical technology to reduce the size of the antenna we are using today.  If we could reduce the size of the dishes that we have now, to half the size and put them on smaller vehicles and reduce the price, the market share would jump hundred and thousand fold, very; much the way the cell phone business has evolved; the initial cell phones cost thousands dollars and the calls were a dollar a minute initially, today the phones are given away free, and the calls are five and ten cents a minute. We are hoping that we will get to that stage but there are many other elements that have to fall into place before that can happen, but looking back the way technology has evolved over the last few years, there is absolutely no reason why this should not take place also in the satellite industry and benefit both consumers and C-COM at the same time tremendously. We know it will happen. Its only a matter of time.”

CEOCFOinterviews: What is the financial condition of the company?

Mr. Klein: “The company should become profitable this fiscal year. We have absolutely no debt of any kind and have adequate cash in the bank to operate and continue our research and development efforts without any outside assistance. C-COM has no venture capitalist waiting to cash in and most of the shares of the company are held by insiders (employees) who want to make this company grow.

We started the company form scratch with zero sales, in 2002-2003 fiscal year we had revenues of over $4 million (an increase of 42% from the year before) and ended the year with a loss of only $85,000 as compared with a loss of $1,216,000 the year before, so we are obviously on the right track. We had a good second quarter and made about thirty thousand dollars, which we are going to try to improve on in the next 2 quarters. The company has thirty million shares outstanding. We have cash in the bank. We are not looking for funding or money just more sales because we are essentially self-financing.”

CEOCFOinterviews: In closing, why should potential investors be interested and what should they know that is not apparent to them when they look at they look at the company?

Mr. Klein: “What investors should know is that this is a rare opportunity to invest in a company that is self-financed, has money in the bank, has no debt and is almost profitable. Most investors probably don’t know we exist because we are a small company and while we play with very large players like Ericsson (NASD: ERICY), Hughes (HNS), Telesat at others, they tend to keep this information to themselves and they are happy to buy products from us and sell it to their customers. The company has a potential upside because this technology is going to be pervasive everywhere, not just in North America, but you will see it all over the world. You will see it practically everywhere where one can have access to either by a vehicle or by rail or even on foot as many of our products can be flown in and dropped off in more and more places. Internet access has become an essential business tool around the world to many people and C-COM is making it possible for companies to conduct business and stay connected anywhere in the world. C-COM, being one of the first to actually deliver this new technology is going to benefit dramatically both from the knowledge that we have acquired and accumulated from 7 years of research and development and from our expertise and ability to design, manufacture, sell and support this product all over the world. There is nobody that can do this on the scale that we are doing it today. The upside is enormous. The stock is about fifty cents Canadian, which is about 38 cents U.S. Investors who are reading about the company should look at it more carefully by checking out our web site at

www.c-comsat.com and taking a look at the technology and than using their imagination envisage how many different applications world wide could take advantage of this technology and how many other companies are out there having this kind of upside with this low risk of an investment. Once they have had a chance to check this out, they will realize that this technology and this company is a forerunner of a great new technology with worldwide potential. I will be pleased to speak with any potential investor interested in contacting me any time.”


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