First Coffee for 25 February, 2006

David Sims : First Coffee
David Sims
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First Coffee for 25 February, 2006

By David Sims

The news as of the first coffee this morning, and the music is Bob Dylan’s The Bootleg Series, Vols. I – III (Rare and Unreleased), 1961-1991.

Boy, it’s another sign of just how great this guy is that songs like “She’s Your Lover Now,” “Moonshiner” and “Blind Willie McTell,” which would be career highlights for most any other singer-songwriter of the past 50 years, are throwaways which end up on the cutting room floor until they’re swept up and put in bootleg anthologies ten, twenty, thirty years later. Astounding.

We’ll move on to other things soon, but just to wrap up the comments First CoffeeSM has been getting on the GlobeTel coverage. Again, like’s AppExchange, I don’t vouch for any of these comments, they might be true and they might not, I’ve weeded out the obvious loons but that’s the thing about loons and liars, they’re pretty tricky. If you make any investment decisions based on what somebody said anonymously, well, I guess you probably do a lot of other stupid things too:

Incidentally, GlobeTel CEO Tim Huff has not responded to my requests for an interview, and the law firm GlobeTel claims represents them in Moscow, Cleary Gottlieb Steen & Hamilton LLP, has not gotten back to me to confirm the representation one way or the other, they don’t list GlobeTel on their web site’s chronology of recent clients.

And there’s a good summary of GlobeTel’s stock on Zachary Prensky’s Upside Surprise stock-tracking blog, that’s an area First CoffeeSM doesn’t cover as such, my interest is in their $600 million Russian Wi-MAX deal, see Zach’s blog for the stock market part of things.

Oh, and happy birthday to Sharon Sims. Love you, Mom.

Kicking off:

“Good bit on GlobeTel, right on the mark. Here is a scoop for you, GlobeTel and MGWB are about to do some big time business together. MGWB is a company called Magicweb run by a Nobel Prize guy named Dr. Becker.

“It will make GlobeTel look like they know what they are doing and save face from this Russian deal that looks to have gone south.”

Another one:

“Enjoyed your article on GlobeTel. Yes I am an investor and have been in ADGI>GlobeTel for over 7 years now.

“Hopefully this is the year our company comes of age.

“Thank you for the interesting snapshots of the various investors’ insights and viewpoints on the stock.

“And yes I am from Istanbul. Immigrated to Canada in 1962 when I was 10 years old. Am quite familiar with the environs on the Sea of Marmara and the Asian suburbs of Istanbul, (Kadikoy and Uskudar).”

Another one:

“I saw that some of the comments discuss all the great equipment that GlobeTel has. One question that must be asked is if any of the equipment is certified in Russia. I doubt it. That will add another 4 months to their implementation.

“I also saw the comment that GlobeTel is working with China Railcom and other operators around the world. Some of these operators are highly suspect. For example China Railcom (which has now changed its name) has very little traffic, but will speak to everybody. It’s no ‘big deal’ to get them to sign anything as long as they don’t have to commit to delivering correspondent traffic.

“Having worked on a lot of emerging market projects, I see holes in almost every claim GlobeTel makes.”

Another one:

“Well, what can I say? Your writing intrigues me. You tell the story almost like writing plot and sub-plots of a Tom Clancy novel. Complete with suspense, doubt, twists and turns, your writing is very entertaining. I have nothing bad to say about your article.”

Another one:

“I see where one investor believed that GlobeTel’s real money was going to be made on the VoIP-International business.

“Well… Russia’s new telecom law that went into place officially on Jan 1 prohibits offering a service like this. Under the terms of the new law any VoIP originating or terminating onto the Russian PSTN, or that terminates internationally, must switched through one of the nation’s long-distance operators. The existing card operators (Zebra, DIrectNet, etc) have all been scrambling to do deals with the incumbents that hold these licenses. The incumbents don’t want the alternative operators to fail, but they will severely limit their profitability.

“Now I think we both know that limiting the growth of VoIP is a regulatory impossibility, e.g., how do you prohibit people from just purchasing the service offshore from one of the thousands of VoIP operators? However, if you are an aspiring Russian operator with ambitions for growth (like GlobeTel), you certainly do not want to be challenging the Ministry of Communications on this. Particularly if you will be seeking their cooperation to get radio spectrum permits, radio plans approved, and equipment certifications for that hot proprietary kit.

“GlobeTel will have no choice but to cooperate with Ministry of Communications and the few incumbents who today have long distance licenses: MTT, Rostelecom, Golden Telecom (eventually Equant, TransTeleCom, and maybe two others).

“Or, GlobeTel could spend another $60 million and build out the requisite infrastructure to be eligible to apply for a long-distance license. This will add another year to their project timeline as well as consume a pile of cash.

“Just nothing about their claims really adds up.”

Another one:

“Caught your article today on GlobeTel and I came at it from a solar/photovoltaic technology perspective.

“I’ve asked the company via e-mail several times going back 2 years as to what solar cells they will use on the stratellite. Response has been zero. Not even a response as in ‘we can’t divulge’ or ‘proprietary,’ just silence.

“There are very few sources for solar cells for the Stratellite and frankly I would be surprised if GlobeTel has arranged supply agreements with a single one... but GlobeTel no doubt would say... stay tuned.

“I’m too busy to stay tuned to their PR machine which sometimes appears to be the core of the company.”

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