Market potential for the V-Server is extremely robust, for several reasons. First, the entire IP telephony market is in the technology-definition stage, which means a market wide open to innovators. Second, the ultimate market potential is as wide as the present population of telephone users. According to sources from the Voice-Over-Net Conference held in September 1997 at the Boston Convention center, the worldwide telephone market is currently worth about $700 billion dollars. The 1999 market projection for Voice-over-Internet equipment alone is about $910 million.

Finally, the technology developed by TEK DigiTel is plainly superior to anything offered to date for the market it targets. Unlike the early IP telephony systems, which are PC-based integrated systems, the V-Server is designed as a stand-alone, embedded system. This means the unit acts as a stand-alone system, no need for a PC, voice card and router. Even the modem will be integrated in a later release. As such, it should enjoy definite quality and product positioning advantages.

Over 31million Americans were online in 1997, and the potential market for Internet access is over 700 million worldwide. Since Fortune 500 companies spend an average of $37 million each year for telecom services, TEK DigiTel expects this ready-made community of business users to be among the first to realize - and reap - the benefits of Internet telephony. Currently, such enterprise networks pay about $0.08 per minute for long distance telephone calls. With Internet telephony, this cost can be driven down to $0.02 per minute. For international calls, the cost can be reduced from $1.00 per minute to $0.15 per minute.

Current users of Internet telephony number about half a million, but their ranks are projected to grow by leaps and bounds. According to InfoTest and Probe Research, 60 million PC users will be making voice calls over the Internet by 1999, and Internet telephony will account for 125 billion minutes of use by 2002. The research institute expects that by 2010, 25% of the world’s phone calls will travel over the Internet. And with TEK DigiTel's technology allowing phone-to-phone long distance calls and fax, the new level of user-friendliness should further propel usage by a large factor.

The primary targets of TEK's international marketing and sales strategy: Interconnectors and phone equipment distributors, Internet Service Providers (ISPs), poised to gain a share of the long-distance market and satellite communications industry, which establishes private and public data communication networks and Internet Telephony Service Providers. These groups stand to make significant gains by acting as primary distributors of the V-Server or on OEM basis - not only delivering the product to the end user but as well as helping to sell the concept of Voice-over-Internet and providing front-line support. This approach takes advantage of existing customer bases while acknowledging the size and diversity of the potential end-user market. It will allow TEK DigiTel to launch global operations quickly and efficiently.