May 2006 Archives

On the heels of announcing a $5m private placement Shift announces our numbers for the Q.

Shift Announces Strong Revenue and Margin Growth in First Quarter 2006

CALGARY, May 30, 2006; Shift Networks Inc. (TSX-V:SHF, Shift, or the Company) a leading
provider of hosted IP communications services for small to medium sized businesses today
reported strong revenue growth in its first quarter, 2006 financial results.

Revenues for the three-month period ended March 31, 2006 grew over 300% to C$495,460, compared to revenues of $158,371 in the first quarter of 2005. Contracted quarterly recurring revenue for ShiftVoice service grew over 1000% to $154,552 Q1 2006 from $15,104 Q1 2005. Operating margin on contracted recurring VoIP revenue increased to 54% versus previous quarters at 47%. The Company anticipates continued margin improvement as the Shift customer base continues to scale. Sales continued to increase over the last 3 months as a result of Shift’s continued investment into distribution and sales capacity and growing customer interest and adoption. Management expects growth to continue to accelerate as additional direct sales personnel, indirect distribution partners, and new markets such as Vancouver continue to gain traction.

"Shift’s growth is a function of investment in our sales channels, number of markets, and strength of service offering,” stated Shift President and CEO, Trent Johnsen. "Shift is seeing increasing client opportunities with the addition of Vancouver as the third major market from companies with multiple locations. We are also experiencing pent-up demand for service in Toronto and have work in progress to offer service there.”

Sales and marketing expenses for the quarter increased in line with sales growth. The Company estimates an approximate six month cycle from addition of sales personnel to consistent subscriber revenue loading, comprised of 60 to 90 days training and lead development for new sales reps and dealers, followed by an average 60 to 90 day sales cycle.

As a result of Shift’s increased investments in sales and distribution personnel through the fall of 2005, new subscriber loads increased from 365 in the fourth quarter, 2005, to over one thousand new subscribers in the first quarter of 2006. Over 40% of subscriber line activations were the result of independent Shift dealer activity. During the first quarter the Company completed a fully subscribed $2,000,000 brokered private placement ("Private Placement").

The Corporation issued 20,000,000 Units at $0.10 per Unit. Each Unit consisted of one common share and one share purchase warrant. Each share purchase warrant is exercisable into one common share at a price of $0.14 until January 12, 2008. Proceeds are being utilized to fund acceleration of the Company's sales and marketing initiatives in Calgary, Edmonton and Vancouver as well as for inventory, provisioning, installation and general working capital. Additional information relating to the Company, as well as the complete First Quarter, 2006,
Financial Statements can also be found on SEDAR at

Shift Networks is a leader in next generation IP communications services for small to mediumsized businesses. Shift Networks trades on the TSX Venture Exchange under the symbol "SHF". Please visit our website at

For information please contact:
Press & Media             Shift Networks Inc.
Christian Darbyshire   Trent Johnsen
(416) 419-9953          President and CEO
[email protected]   (403) 355-2703

Free VoIP is back, for now.

May 16, 2006 10:23 AM | 22 Comments

Hot on the heels of the AOL Phone Line news Skype announced free calling for the and until the end of 2006. Dialpad built their business on this in the late nineties and early part of the new millennium and recently were bought by Yahoo! to complete their Phone In and Phone Out capabilities. Free is good, maybe the telcos will follow along, yeah rightwink

Tom has all the info this.

VoIP and Canadian Business

May 11, 2006 8:32 AM | 0 Comments
Having lived in Canada since birth it’s seems a bit weird that I have not worked more closely with some of the telcos and larger telecom vendors here. Although if you take a look at the market and how Canada usually trails behind the US and Europe in the implementation of new telecommunication technology it may not seem weird at all. Most of my business in previous projects came from the US and Europe, they are the first to jump on new technology. Strangely this country builds some of the best technology in SIP today. It’s true, Canada is slow to deploy but we can build it like there is no tomorrow. Well, I have found one company that is going to change all of that. Shift Networks is a company that is delivering on-demand IP communication services for business leading in Canada.

Now, as the CTO for Shift my job is to deliver SMB 2.0 (tongue now planted firmly in side of cheek) , which can be summed up as Simple, Powerful, Affordable and Reliable on-demand business communications services.  Basically, I get to build the best on-demand SMB communications infrastructure in Canada.  It’s a dream really! I get to surround myself with really smart people whose new mission in life is to build a network using SIP and deploy those cool features I spent so many years designing.  Now we’re talking!

So what if anything stands in my way? Hmm, not much it would seem. Even this recent CRTC burp will not hold us up.  By now most of you have heard that the CRTC has been told, by our new government no less, that they need to review the recent VoIP ruling, this is the first time this has happened in over 10 years. Fellow blogger, Jon Arnold made some great points and references a submission made by Jeff Pulver.  I for one believe that the telcos who own nearly 95% of the market share will certainly try to crush innovation if they are allowed to compete on a level playing field. If we are going to review the ruling that allowed non-regulated VoIP operators to compete directly with the incumbents then let’s make sure we protect the innovators so they are not gobbled up in price wars with the incumbents who are hell bent on owning the entire market. Monopolies suck, the consumer gets the shaft and innovation takes a back seat. Let’s hope the CRTC doesn’t ignore this in their review. Something similar is happening the US, Alec Saunders has more on that.

On a sidebar, some of you misht be asking yoiurselves why I have not been as active as I once was on this blog and the simple answer is, I am super busy with my new job. In addition, my analyst podcast has been shelved due in part to Angelo Liberatore moving into a new department at Credit Suisse, congrats on the new gig Angelo!

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