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.