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Axia Net Media Corporation (AXX) |
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CEOCFO Current
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This is a printer friendly page! Axia delivers proven customer-driven solutions in
two key markets: it designs and manages high-performing IP broadband networks serving both
urban and rural regions; and it creates powerful, interactive learning applications that
help people and organizations improve their performance while meeting individual learning
styles. BIO: Art, trained as an engineer, held a number of senior executive positions in the oilpatch, serving as Husky Oil's president and chief executive officer from 1984 - 1993. After leaving Husky, he spent two years as special adviser to Li Ka-Shing, Chairman of the Board of Hutchison Whampoa Ltd., focusing on international investments. He also maintains active ties to
his family's agricultural roots, sitting on the board of the Sunterra Group of Companies;
as well as IPSCO Inc. (Regina); the World Wildlife Fund; Rawlco Communications; Calgary
Inc., and Alta Genetics Ltd. Organizations
and individuals working in today's Knowledge Economy share a common set of needs:
Information that they can be confident is reliable, dynamic, targeted to their specific
interests, a clear framework for that information and global accessibility across a
variety of delivery platforms. These common needs cross national borders, time zones and
business sectors. Axia meets these needs by combining the power of high-speed networks
with high-end applications. They ensure reliable global access by developing
state-of-the-art networks in partnership with leading technology solutions providers. The
impact of networked communications and learning on individuals and organizations alike is
clear: partners, peers or customers can be engaged one-on-one, wherever they are in the
world, at any time: dialogue is not handcuffed by local business hours or office
locations. Axia has bundled its premises infrastructure
designers and creators under a nationally recognized and respected name - Netricom. As
Canada's largest vendor-neutral provider of network communications services, Netricom can
offer customized and cost-effective solutions centered on cabling infrastructure, data and
voice networks, or wireless and IP-enabled customer applications. Infrastructure services
include consulting, design, project management, procurement, installation and maintenance.
Solutions can be created for a single floor, WANs and LANs or a nationwide network. Axia's
customized training and career development programs support the need for lifelong
learning. Their highly sophisticated, interactive applications provide easy access to
targeted, reliable information and knowledge. For example, Axia's Aerospace group works
with airlines and airport authorities to create online communities, where employees can
learn about local safety issues, discuss concerns, track problems and develop solutions.
Axia's programs do not replace the instructors or the flight simulators - but they raise
the bar by enriching the learning experience. CEOCFOinterviews:
Mr. Price, please tell us about Axia NetMedia Corp. Mr. Price:
“When Axia NetMedia began, it was with a vision that IP broadband networks were going
to transform both how the network space worked and how people used interactive networks.
Our view was that the most compelling revolution would be in the transfer of knowledge
using these interactive networks. We have two arms to the company:
a knowledge application development, which truly looks at knowledge from the user’s
perspective as opposed to the deliverer or teller’s perspective; and another
specializing in interactive networks that can move media equally in each direction.” CEOCFOinterviews:
Where are you today with those the two divisions? Mr. Price:
“We now have these two arms to the company, each with precedent-setting wins. On the
interactive network side, we were the successful party for the long-term operation of a
broadband network right across the province of Alberta, supplying 4,700 locations of
government offices, healthcare offices and schools with a enterprise wide IP broadband
network. That is under construction and expected to be completed in 2004.. Axia will
operate that network for the next ten years. In the network space, we use a revolutionary
business model tied to next-generation technology. It is truly a breakthrough in terms of
solving the digital divide with access to the high-powered broadband networks. On the
application side, we were the successful party to create The Learning Zone for the Royal
College of Nursing in the U.K., which is an online learning environment application
delivered through the Internet for in excess of 300,000 nurses in England, Ireland,
Scotland and Wales. That is an environment where the nurses are continually kept
up-to-date with the latest practices and procedures as they relate to their particular
area of nursing, and also tracks their education and career orientation.” CEOCFOinterviews:
Please tell us about the awards for The Learning Zone. Mr. Price:
“The core of The Learning Zone is a simple fundamental: that people are
individual when it comes to knowledge, each with their own gaps. All of our education
historically has been from one (the teacher) to many (the students), mainly in the telling
mode, whether that is the newspapers, textbooks, lectures, and television or radio
programs. They are all broadcast programs for instance from me to you. So I will give you
my knowledge, irrespective of what you individually know. The revolution that is available
is to treat that individual as a custodian of their own knowledge, to find the gaps that
are meaningful to them and then to fill those gaps. The critical thing is to come up with
interactive media and database applications that allow that customer to experience more of
a personalized learning environment than the one that they grew up with. We have won a
number of international awards for The Learning Zone. We win them because we are pushing
the envelope in terms of enabling the customer or learner to be in charge of a more
efficient learning environment than going to a seminar or classroom, or reading a
textbook.” CEOCFOinterviews:
Please explain more about the Alberta SuperNet, and how all of the funding is going. Mr. Price: “The challenge is that with deregulation of the telecom industry, the metropolitan centers have the carriers competing with one another. The non-metropolitan centers have effectively no competition whatsoever. With the deregulation, the smaller markets have not had any access to anything that looks remotely like broadband or high-performing IP networks. Around the modern world, that challenge has become a social challenge because if you want to participate in a job or a business that depends on having access to broadband, you have to move to the metropolitan spaces, and even there, the broadband performance leaves something to be desired. The Alberta government concluded that the Axia designed concept would allow it to provide a two-pronged solution. One prong would make broadband available in the smaller markets in Alberta and the second prong would be that the government itself could get a province-wide network for the critical social services. We came up with a concept that creates a government enterprise wide network, so it is ubiquitously connected. The government has operations in essentially all the communities in the province because of the school system and the healthcare system. Having gone into those communities, we came up with a concept that drove equal open access and competition in those smaller communities to cater to those other customers, whether residences or businesses. With the Alberta SuperNet, we
really have two revenue streams: one is the government’s enterprise wide operations;
and the other is the businesses and citizens who gain access through competitive ISPs and
telecom companies. It creates a competitive playing field. The fee structure for that is a
charge for the use of the network, and that will be somewhere in the range of forty or
fifty million dollars a year for a ten-year period. The result is a low price competitive
broadband, province-wide.” CEOCFOinterviews:
Can they get broadband through you? Mr. Price:
“We are the direct provider to the government but the other customers in rural
Alberta get access through points of presence, and then we price those points of presence
as if it is in the metropolitan space. We actually remove ourselves from competing in
local access for other customers and that creates an open playing field. So the party with
the network, being Axia, is not in competition with the other parties who want to provide
services to the people in those communities.” CEOCFOinterviews:
What do you need to do to maintain the network and is there still building out and costs
involved there? Mr. Price:
“The network will be completed by the end of next year (2004). On the building side,
we provide the high-end electronics and we provision them and turn up the network. On the
operating side, we maintain the network and operate it for the ten-year period. We incur
the typical maintenance cost of an optical wireless network.” CEOCFOinterviews:
Does the fact that you are the manager of this process help you in the creation of more
business? Mr. Price:
“The role we play and the very market niche participation that we have, where we are
not a typical telco, allows us to have this same discussion elsewhere. The same problem
Alberta has is elsewhere in Canada, the United States, Western Europe and Australia. The
deregulation of telecom had all the advantages of starting to drive some commercial
efficiency into the telecom space. What it did was create a rural/urban split. Rather than
re-regulate, this is an ideal answer to that challenge of solving the rural/urban split
that has come out of this deregulation.” CEOCFOinterviews:
Is there much competition in your area of the business? Mr. Price:
“Most people are in the traditional telecom sector, and if they do un-traditional
telecom, there are conflicts with the role that Axia has. We are a specialty player; but
we do big enterprise networks for big customers, so they are big contracts. We do them in
a special way and do not participate in the rest of the telecom market the way the
carriers do. We actually do not see too many people like ourselves because most people are
involved in the traditional voice and cable business.” CEOCFOinterviews:
Is Axia Ireland an outgrowth of this? Mr. Price:
“Axia Ireland is a company that Axia has in partnership with a local Irish company
called IAWS (Irish Agricultural Wholesale Society), which is organized to bid on a
broadband solution for the country of Ireland. The country has been looking for various
ways of dealing with this challenge and there are a number of policy discussions taking
place in Ireland with respect to solving the same kind of challenge Alberta had. That is
what Axia Ireland is organized to do.” CEOCFOinterviews:
How do you market your products and abilities? Mr. Price:
“We need to educate the customer of the compelling economics of these solutions and
class of network service that is actually available. Most customers do not know that this
can actually be done. They do not know that these IP networks can actually perform at the
level that they can. We provide throughput-guaranteed-service type networks instead of
best-efforts networks. The second thing is they do not know how such a business model can
be deployed to drive competition. . So we end up doing high-level executive
communication and discussion. It is education of what can be done and how compelling and
cost-effective a performance proposition it really is. Each one of these networks has a
complex and long sales cycle.” CEOCFOinterviews:
What do you need to do to keep up with technology? Mr. Price: “The first thing
a potential customer should do is to make sure they have a business model that empowers
them to take advantage of technology, as opposed to protecting the status quo and
historically sunk investments. That is: a business approach that is lined up with
changing technology. The second is to build their fundamentals around things they know are
going to last. For example, the IP protocol is going to be a lasting protocol. The world
had its years and decades of proprietary networks and IP is a global standard protocol.
That means that if they stay with it, it will be inter-operable, and the customers will
insist on that. So if they stay at the IP layer and they have a business model that allows
them to adopt the enhancements in technology, they can optimize the use of technology,
which is what we do. If, on the other hand, they have a business model that has them
entrenched in history, then there are many barriers to adopting that technology. For us it
is an advantage if we stay within our open network and global standards. It becomes higher
performing and less costly, which is usually what a change in technology means.” CEOCFOinterviews:
What is it that you are doing there and are others doing the same thing? Mr. Price:
“In the interactive media part of the business, we take it as close as we can with
technology today, and we are still at the front end of this by actually giving the
controls to the customer. That means we move into the customer-control space rather than
the publisher-control space. Our customers need to want to understand and want to do that.
We are a long way from a Web page and we are far into that space of customer database,
assessment and customer interest. We need to steer that customer to an environment that is
a value-added environment for them. There are other people at the forefront that are
approaching it the same way. It is typically not the old publishers and the old directors,
it is much more like the one-on-one tutorial and how they would approach the subject
matter as compared to a teacher, professor or lecturer. It is more in the competency
space. What is going to happen with broadband networks and the media exchange will add
another dimension. Somebody could learn to play the violin in rural Alberta by being
online with the Calgary Philharmonic Orchestra. The technology will enable that to happen,
whereas there was nobody in that person’s community in rural Alberta that even knew
how to play the violin.” CEOCFOinterviews:
How has the general downturn in technology affected the company, and how has it affected
your missionary work? Mr. Price: “The downturn in the technology market has started to clear out all the noise in the system, where there were many players that did not have substance and were dealing with business models that were not sustainable. The customers were confused by all of that. It is healthy that it falls away and you are left with winners and real value propositions as opposed to marketing, advertising and promises that do not hold up. That part is probably good, of course correlatively to that is that the buyers are tougher with their money. There are several organizations that are interested but ‘on hold’ and the broader economic is slower.” CEOCFOinterviews:
I see you have a continued emphasis on controlling costs; what are you doing in that area? Mr. Price:
“Both of our businesses are getting further down the path with their reputation with
customers and potential customers.. We won awards in the interactive media space and we
won that business in the network space. It is quite practical now for the company to
define its focus more in those areas. The company grew out of the combination of media
network assets that were more traditional businesses and enabled us to have customers and
revenues and cash flows in the more traditional spaces. Now we can wean off and focus
truly on interactive networks and interactive media. The company is going through that
process currently because it has established its credentials in the next generation space,
and it can wind up its participation in the traditional last generation space.” CEOCFOinterviews:
What is the financial condition of the company? Mr. Price:
“We went through a period in the last quarter where we had large outstanding
receivables but we collected half of those in the last quarter and finished collecting
them this quarter. Now the company is through a liquidity pitch period that we were stuck
in for the last six months because of this party not paying its bills. We are now in the
position where we have nominal debt, we have maybe six or seven million dollars worth of
debt, and positive cash flows and we are moving into a positive earnings environment. We
are going forward into a stable balance sheet period.” CEOCFOinterviews:
Why should potential investors be interested and what should they know that perhaps is not
readily apparent when they look at the company? |
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