Telular Corporation 2001 Annual Report

networks. The key trends that are fueling the worldwideadoption of WLL/WCA programs include the following:• Extensive worldwide coverage of cellular and PCSwireless networks;• An accelerating trend toward privatization oftelecommunication service in both developed anddeveloping countries;• Development and adoption of next generation digitalnetworks that provide greater voice capacity and higherdata speeds;• Service network providers acceptance of cellularnetwork solutions as fast, cost effective answers to theircustomers’ unfulfilled demand for telecommunicationsservice; and• The licensing of multiple cellular operators in a givenregion, which intensifies competition among cellularservice providers to capture additional minutes of usageand the potential for a large wireline bypass market.TARGET MARKETS AND PRODUCT APPLICATIONSThe Company’s revenues to date have been derivedprimarily from the sale of PHONECELL ® FWTs in internationalmarkets. Domestic revenues to date have beendriven primarily by the Company’s TELGUARD ® CellularAlarm Transmission Systems, yet a growing demandfor PHONECELL ® FWTs in the USA is beginning to havea favorable impact on domestic revenues.The Company’s major target market opportunitiescan be grouped into several categories:• Wireless Basic Telephone Servicevia cellular Wireless Local Loop• Wireless Competitive Access• Least Cost Routing (LCR)• Telemetry and Remote Monitoring• Cellular Alarm Transmission Systems• Cellular Public Phones• Portable Cellular Access• Disaster Recovery and EmergencyBack-up Services.Wireless Basic Telephone Service Some countries areevaluating or have already deployed cellular telecommunicationssystems in conjunction with, or as an alternativeto, the expansion of their basic wireline systems. ProvidingPHONECELL ® FWTs to this market, which is called WirelessLocal Loop, is one of the most significant market opportunitiesfor the Company’s products.Wireless Competitive Access In both developed anddeveloping countries, the existing mobile cellular communicationsinfrastructure can be utilized to provide basiccommunications services. This is occurring both in ruralareas where it can be costly to provide wireline service andin urban areas where there is a demand for alternativesto the incumbent local wireline carrier.Least Cost Routing PHONECELL ® Terminals can be usedin conjunction with PBX and Voice over Internet Protocol(VoIP) systems to provide cost savings. The user can takeadvantage of mobile to mobile and long distance ratesthat can often be less costly than the rates charged bywireline carrier. The PBX or VoIP equipment is programmedto recognize calls that can benefit from such wireless ratesand route such calls through the wireless path.Telemetry and Remote Monitoring The use of PHONECELL ®Terminals for remote-monitoring and telemetry applicationsis a common application of the Company’s technologyin developed countries, especially in the USA.Cellular Alarm Transmission Systems Remotely monitoredalarm systems are routinely subject to catastrophic failureby virtue of telephone lines being cut by intruders orinadvertently cut by construction crews. Cellular AlarmTransmission Systems were one of the first applications ofthe Company’s technology and are a growing segmentof the business. Use of the Company’s specialized productsallows an alarm monitoring system to automatically switchto a cellular network in the event of a telephone line failure,allowing alarms to be transmitted.Cellular Public Phones A growing application for theCompany’s technology is cellular public phones. Whilesome are the traditional coin and credit card devices,2 TELULAR CORPORATION