Next Dynamics Inc. (NEXD)

[coolnapz]

I just spoke with Steven Bethke, the CEO of the firm [[phone]] and he reiterated the business model to me. I was able to get in touch with him within 5 minutes and spoke for about 15 minutes.

Just to reiterate, they sell land line subscription service to poor people. This service will be largely subsidized by existing government programs, e.g. if you see that 6 dollar USF fee at the bottom of your phone bill that goes toward one of those funds. They carry no inventory and do not own the wires so it is a matter of turning on the service if they are paid, and turning off the service if they are not.

There are a lot of poor folks who live in subsidized housing, or congregate in poorer neighborhoods, which make for a geographic target which is approachable through civic leaders, community programs, city council, local paper, advertising in front of the local bodega or grocery store, housing authority, etc.

EVPH has been focusing on getting their technology to work seamlessly. This means not only being able to collect the prospect through the front page, and turn them into a customer, but also making sure that the customers telephone services turns on and off seamlessly in conjunction with their payments.

They have now entered the initial portions of phase 2, which is marketing. Steven says that they expect to release details regarding the marketing push within the next 30-45 days.

My personal take is that it all comes down to the growth of subscriptions. For a service like this, it just comes down to advertising, marketing, and word of mouth. It is not a very complicated service so the analysis and forecasting needs to just focus on the subscription growth. I have a small position in this company but I can afford to put a little more, especially with proof of some level of subscription growth.

Remember, a lot of their subs are going to be subsidized, so this should be very sticky revenue.