Item
1. Business
Background
SIGMABROADBAND CO. is a Georgia company that
is in its development stage. The Company is engaged in the business
of providing voice, data, and digital video services as a triple
play bundled service to rural markets in the United States of
America. During the period we are considered an emerging growth
company, we will be exempt from the provisions of Section 404 (b)
of the Sarbanes Oxley Act of 2002 and Section 14 (a) and (b) of the
Securities Exchange Act of 1934, as amended. We have elected to use
the extended transition period for complying with new or revised
accounting standards under Section 102 (b) (1) while we are
considered an emerging growth company. We would effectively retain
emerging growth company status up to five years from the date of
the first sale of common equity securities pursuant to an effective
registration statement or until we attain $100 million in total
annual gross revenues. (See “Risk
Factors”)
SIGMABROADBAND CO. has never declared
bankruptcy, it has never been in receivership, and it has never
been involved in any legal action or proceedings. Since becoming
incorporated, the Company has made significant purchase of assets
in order to enhance its business but has not sold any of its
assets, nor has it been involved in any mergers, acquisitions or
consolidations. SIGMABROADBAND CO. is not a blank check registrant
as that term is defined in Rule 419(a)(2) of Regulation C of the
Securities Act of 1933, since it has a specific business plan or
purpose.
Since our inception, we have been engaged in
business planning activities, including researching the industry,
identifying target markets for our services and developing our
SIGMABROADBAND CO. models and financial forecasts, performing due
diligence regarding potential geographic locations and acquisitions
most suitable for establishing our offices and identifying future
sources of capital.
Currently, SIGMABROADBAND CO. has officers
and directors who have assumed responsibility for all planning,
development and operational duties, and will continue to do so
throughout the beginning stages of the Company. Other than the
Officers/Directors, there are no employees at the present time. We
do anticipate hiring employees when the need arises.
SIGMABROADBAND CO. currently has intention to
engage in a merger or acquisition with any unidentified company. We
may pursue strategic acquisitions that complement our current
business model within the telecommunications industry which may
allow us to expand our activities and capabilities and advance our
production.
SIGMABROADBAND CO.’s fiscal year end is
December 31.
Industry
Background
Our business plan is to deliver innovative
communications, information and entertainment. Our voice, data and
video products and services offer over intelligent wireless,
wireline, cable, fiber, broadband and global IP networks that meet
customers' growing demand for speed, mobility, security and
control. As a committed corporate citizen, we use our advanced
communications services to address important issues confronting our
society today, especially in rural America. We plan to follow a
strategy of being first to our regional markets with technology and
services first introduced in metropolitan areas by national service
providers.
We intend to be a full service,
facilities-based cable operator, local exchange and inter-exchange
carrier serving both residential and commercial customers by
providing voice, data and digital video services. We intend to
employ the newest technology available in the marketplace today,
which provides quality of service (QoS), reliability, security,
redundancy and continuity of service always. In the future, we will
be recognized as a leader in the data network, IP telephony and
cloud-based services. Our potential customers are located in some
of the country’s largest cities to families living in rural
communities. We intend to establish a dominant national presence in
the triple-play broadband, cable and telecom industry in
America.
Approximately 100 million Americans do not
have broadband at home today and most of them are living in rural
communities across America. We intend to be a leading provider of
cost-effective and reliable technology services for home, small to
medium sized businesses in the areas we serve and to create value
to our shareholders.
Our
Mission
To be a leading provider of cost-effective
and reliable technology services for home, small to medium sized
businesses in the areas we serve and to create value to our
shareholders.
Our
Vision
To be a force in the technology industry that
will transform the way of life in our communities.
Our Commitment to
Customers
To provide optimum support and service using
state-of-the-art technology and innovative customer care, building
long- standing partnerships with our customers, ensuing mutually
beneficial returns.
The
Market
FCC Broadband
Report Synopsis:
As per the U.S. Federal Government, Broadband
is the great infrastructure challenge of the early 21st century.
Like electricity a century ago, broadband is a foundation for
economic growth, job creation, global competitiveness and a better
way of life. It is enabling entire new industries and unlocking
vast new possibilities for existing ones. It is changing how we
educate children, deliver health care, manage energy, ensure public
safety, engage government, and access, organize and disseminate
knowledge.
But broadband in America is not all where it
needs to be. According to the FCC Broadband Report Synopsis,
a
pproximately 100 million Americans do not have
broadband at home
. Broadband-enabled health
information technology (IT) can improve care and lower costs by
hundreds of billions of dollars in the coming decades, yet the
United States is behind many advanced countries in the adoption of
such technology. Broadband can provide teachers with tools that
allow students to learn the same course material in half the time,
but there is a dearth of easily accessible digital educational
content required for such opportunities. A broadband-enabled Smart
Grid could increase energy independence and efficiency, but much of
the data required to capture these benefits are inaccessible to
consumers, businesses and entrepreneurs. And nearly a decade after
9/11, our first responders still lack a nationwide public safety
mobile broadband communications network, even though such a network
could improve emergency response and homeland
security.
SIGMABROADBAND CO. was created to take
advantage of the market demand for communications and entertainment
bundled services priced within the reach of all consumers. We are
deploying voice, data, digital video and other broadband related
services to Rural America. We are positioned to provide services to
45,000 homes in Arizona and another 3,000 homes in Missouri. We
plan to extend the Missouri network to another 15,000 homes
bringing the total in our franchised area to 18,000. Our intended
$99 per month triple-play service standard package of voice, data
and digital video will provide a compelling offer that will attract
many new subscribers and be a competitive advantage going forward.
None of our known competitors have such an offer and if they choose
to follow, they will erode their existing revenue
base.
Market Pricing
Strategy
Our
key market
pricing strategy is to bundle our services to provide a more price
competitive package to the customers
. The
"all inclusive and flat rate"
billing we promote, allow customers to plan for and budget a fixed
price for all their monthly telecommunication services. This
billing strategy sets us apart from all of our existing
competitors. We intend to provide optimum support and service using
state-of-the-art technology and innovative customer care, building
long-standing partnerships with our customers, ensuing mutually
beneficial returns.
Services and
Product
Our technology allows us to provide Broadband
triple-play services to any market nationwide. Our core business
objective is to offer a bundling of services to include telephone
service, Internet access, cellular and cable television nationwide;
and also providing cloud-based and IPtv services. The Bundled
Service or T3
(Triple Play)
will be made available to the public at a prepaid fixed cost of $99
per/month with no taxes, no contract, no deposit and no credit
needed to the low income families, retirees, unserved, underserved,
underprivileged and rural communities, in order to help bridge the
technology usage gap in these areas. The potential customer base is
extensive, as it literally consists of businesses, residential and
rural customers- throughout the 95% of the U.S. covered by our
network infrastructure.
Competition
Across the United States, Multiple Systems
Operators (MSOs) compete with Direct Broadcast Satellite (DBS)
providers and incumbent telecom companies. We believe that we
compete with other providers in three product categories: Video,
Voice, and Data.
We are poised
to compete with any competitor that enters our market in terms of
price, quality of service and no term contract.
Since our
operations are in rural areas, we may not have to compete with any
regional and national carriers, except for local independent
operators and DBS providers.
Market
Strategy:
Rural vs. Urban
Markets
In rural markets, cable and DBS are often the
only providers of video services. Recently, cable companies have
been losing video share to DBS, primarily due to the fact that DBS
has a greater number of high-definition channels and provides
better customer service. We are trying to make up ground by pushing
bundled services to customers (HSD and telephony). The current
trend of RBOCs providing FTTN or FTTP will mostly affect
competitive dynamics in urban markets not in rural markets, as the
high amount of CAPEX being spent can only be justified in areas
with high density.
We will be
the only major triple play service provider in all of our rural
markets where our cable/hubs infrastructure will be located at
present time.
The competitive dynamics between RBOCs and
Cable MSOs in rural areas, where FTTN and FTTP are not available,
favors cable. We will continue to have a competitive advantage in
high speed data, voice and digital video. Traditional RBOC services
generally do not include video, which will allow us a large
bundling advantage. Wireless substitution is most likely to
continue, though the rate of substitution will be less in rural
areas, where users are more likely to keep wireline phones because
of cellular signal issues.
We
believe that Cable MSOs like SIGMABROADBAND CO. operating primarily
in rural markets will face more favorable competitive dynamics than
those in urban markets.
Our Triple Play
Price Strategy and Differences
We set ourselves apart from the competition
not only by providing a superb customer care and quality of service
but also offers our customers a flat rate service at $99/month
including all applicable taxes and without any term contract ever
for the exact same services that the competition may provide in
areas we serve.
Operating
Strategy
SIGMABROADBAND CO. offers a quality consumer
experience, at a reasonable price for entertainment, communications
and all broadband services. We intend to always value our
customer’s needs and their requests, while balancing the
requirement to meet our financial responsibility. Our focus will be
greater than customer service; it will be on serving the customer
and our strategic assets.
Our key to success is to bring the strength
of our business development experiences, well trained personnel and
cutting-edge technologies in every segment of our core businesses
to increase profit margin and increase investors’
satisfaction, while we deliver value from diversity and promote
sustainability for economic and social development.
Regulation
Challenges
There are multiple and intense regulatory
battles over triple-play services as incumbent telephone companies
and incumbent cable operators attempt to keep out new competitors -
since both industries historically have been regulated monopolies,
regulatory capture has long been as much a core competency for them
as have been prices and terms of service. Cable providers want to
compete with telephone companies for local voice service, but want
to discourage telephone companies from competing with them for
television service. Incumbent telephone companies want to deliver
television service but want to block competition for voice service
from cable operators. Both industries cloak their demands for
favorable regulatory treatment in claims that their positions favor
the public interests.
Business
Challenges
The challenges in offering triple-play are
mostly associated with determining the right business model,
backend processes, customer care support and economic environment
rather than technology. For example, using the right billing
platform to address a variety of subscriber demographics or having
the appropriate subscriber density to financially justify
introduction of the service are a few factors that affect decisions
to offer triple-play services.
In addition to the challenges mentioned
above, there are a number of technical challenges with regards to
the rollout of triple play services. Broadband voice, digital video
and high speed data all have different characteristics and place
different burdens on the network that provides access to these
services. Voice services are greatly affected by jitter, whereas
packet loss has a greater effect on digital video and data
services. In order to use a shared network resource such as cable
or DSL, we may use network equipment that employs
quality-of-service mechanisms to adjust to the requirements of the
different services.
SIGMABROADBAND CO. creates a bridge between
local exchange carrier and cable service provider all into one
network and from one provider, which in turns help reduce the
customer’s cost, better quality of service and best customer
service experience.
The other challenge for us is to provide
superior service at a price value point that will attract customers
away from existing telecom and cable operators in areas where we
compete. We are confident that we will be very competitive with our
multiple channels of basic video, a minimum 1.5d/2.0 Mbps Internet
connection together with an unlimited local/domestic long distance
package all for $99 per month and no other hidden cost to the
customer in one network will attract many customers to our
Company.
Our financial forecasts reflect a rigorous
marketing approach that takes advantage of being the newest
broadband triple-play provider in the market we serve. This will
create a baseline for a significant marketing program should we
reach the top of the interest curve.
Our
Technology
We intend to operate Class 4/5 voice
switching, routers, digital multiplexers among others and a cable
network which allowing us to lower the cost of IP and TDM voice
termination to our customers. To date, we have access from 23
head-end locations capable of serving well over 30 rural counties
and communities. The current network without expansion spans 923
linear miles, covering more than 8,000 square miles, utilizing 732
miles of fiber optic cable or 4 million feet of fiber
infrastructure.
Employees
SIGMABROADBAND CO. with the exception of its
officers and directors has no other employees, however, works with
several outside consultants who have substantial industry
experience and who have dedicated time and effort on behalf of the
Company.
The Company may be required to hire an
attorney on a consultancy basis to navigate permit and licensing
requirements, but otherwise SIGMABROADBAND CO.’s Officers and
Directors intend to do whatever work is necessary to bring the
Company to the point of earning revenues from the sale of our
services or further acquisitions. All operational functions such as
customer service representatives, telemarketing, warehousing and
fulfillment are planned to be outsourced. Human resource planning
will be part of an ongoing process that will include constant
evaluation of operations and revenue realization.
Board
Committees
SIGMABROADBAND CO. has not yet implemented
any board committees as of the date of this Annual Report on Form
10-K.
Directors
SIGMABROADBAND CO. is authorized to have no
more than seven directors. However, in no event may SIGMABROADBAND
CO. have less than one director. Although the Company anticipates
appointing additional directors, it has not identified any such
additional persons.
Compensation of
Directors
Because we are still in the development
stage, our directors are not receiving any compensation other than
reimbursement for expenses incurred during their
duties.
Compensation
Policy
Because we are still in the early stages of
formation and development, our directors and officers are not
currently receiving any compensation.
Stock
Option
Because we are still in the early stages of
formation and development, our directors and officers have not
received any stock options or freestanding SARs.
Stock Option
Plans
Our board of directors has not adopted any
Stock Option Plans as of the date of this Annual Report on Form
10-K.
Bonuses
To date, shares have been granted to
management for achievement of certain goals in the initial phase of
establishing the Company’s operation and organization. Any
bonuses granted in the future will relate to meeting certain
performance criteria that are directly related to areas within the
executive’s responsibilities with the Company. As the Company
continues to grow, more defined bonus programs will be created to
attract and retain our employees at all levels.
Employment
Contracts; Termination of Employment and Change-in-Control
Arrangements
We do not have employment agreements with any
of our employees, however, we intend to enter into employment
agreements with our key executives and other member of management
as the business grows.