THE SERVICE

The Enterprise Network Services subsidiary of ERF Wireless provides a turnkey design and implementation service in the area of secure wireless broadband networks for enterprise-class applications. In particular, Enterprise Network Services has over the past several years focused its attention primarily on the provision of enterprise-level wireless broadband network design and implementation for the regional banking industry in many parts of the country.

This unique application of wireless broadband technology provides regional financial institutions, with between ten and one hundred branches, an extremely cost-effective way to replace all of their recurring T1 and other telephone company costs with a one-time capital investment that can typically be recovered in less than three years. The resulting encrypted wireless broadband network connects all of their branches to the central bank and can provide up to 45Mbps of continuous bandwidth as compared to the typical 1.4Mbps of a T1 connection from the telephone company.

The Enterprise Network Services wireless network design is strictly for WAN point-to-point connectivity and is not intended for “within the building” wireless applications. Once in place, this enterprise-class wireless network not only replaces all of the data connectivity requirements between locations, but also has the excess capacity to provide VoIP telephone service, video surveillance, document imaging and Internet connectivity for all of the enterprise locations.

In addition, Enterprise Network Services also typically enters into an agreement with financial institutions on behalf of ERF Wireless to resell all of their excess bandwidth capacity to commercial and retail customers within their coverage area under a revenue-sharing agreement, thus further reducing the overall cost to the financial institution. Any such revenue-sharing agreement is administered by the Bundled Services Division of ERF Wireless.

In order to satisfy the security concerns of banking regulators, Enterprise Network Services has developed a unique and proprietary encryption device (CryptoVue), consisting of hardware and software, as well as an integrated security protocol and 24/7 monitoring, that gives it a distinct advantage in the marketplace. ERF Wireless does not know of any comparable type of monitored security device being utilized in enterprise-class financial networks. In addition, as part of the integrated security protocol, financial institutions also enter into a long-term 24/7 network monitoring and maintenance contract with Enterprise Network Services on behalf of the Network Operations Division of ERF Wireless. This contract is a major part of the overall CryptoVue security protocol and is offered to satisfy concerns of banking regulators.

WIRELESS PRODUCTS

The wireless broadband radio equipment deployed by Enterprise Network Services is a special commercially-hardened version of the Motorola Canopy Wireless Platform configured to form Point-to-Point and Point-to-Multipoint network connections for financial institutions that can be used in wireless backhaul, bridging and other data applications. The Point-to-Point configuration can span distances of up to 35 miles. Distances of greater than 35 miles can be covered by daisy chaining the units across multiple relay towers. The Point-to-Point systems generally operate at 5.7 GHz and a raw data rate of 10 Mbps, 20 Mbps or 45 Mbps with measurable data throughput rates of 7+ Mbps, 14+ Mbps and 31+ Mbps respectively. Motorola also offers a 5.2 GHz Point-to-Point and Point-to-Multipoint system that ERF Wireless deploys on short-haul segments up to a distance of 10 miles.

Enterprise Network Services uses Motorola-authorized and FCC-certified custom-manufactured mounting hardware, tower struts, dishes, radomes and cabling to greatly extend the useful life and reliability of the system. While there may be many lower-cost transmission hardware solutions available, Enterprise Network Services adheres to the philosophy that only enterprise-class hardware should be utilized in enterprise-class networks.

MARKET DEPTH

The market reach for Enterprise Network Services’ products and services for regional banks extends nationwide and consists primarily of financial institutions with at least 10 branches and assets between $200 million and $9 billion. Our statistical analysis indicates approximately 1,800 financial institutions fit these parameters.

With the advent of Check 21 imaging, VoIP and other bandwidth-intensive applications, financial institutions are finding that traditional point-to-point T1 circuits are no longer sufficient to meet their data communications needs. Upgrading their data circuits to dual T1s (3Mb) in some locations can cost as much as $2,300 per branch per month, plus the cost of upgraded communications equipment and routers. A typical ERF Wireless enterprise-class wireless broadband network can be constructed can range from a few hundred thousand dollars to millions of dollars, depending on the number of branch locations involved as well as the geographic locations of the branches. Thus, this particular enterprise-class wireless broadband application offers revenue growth opportunities that are only limited by the number of simultaneous banking network contracts that Enterprise Network Services can administer at one time.

Enterprise Network Services is utilizing a project management approach to administering these contracts and is heavily outsourcing many of the construction functions in order to maximize the potential for rapid revenue growth. Over the past eighteen months, Enterprise Network Services has successfully implemented five such wireless broadband regional banking networks in three states. The same general technology and implementation approach can be applied by Enterprise Network Services to other enterprise-class wireless broadband customers in a manner similar to the application used for the regional banking industry. Enterprise Network Services anticipates exploring such other applications in the near future.