There was exciting news this week in the International telecommunications sector.  Industry leader Elephant Talk Communications, Inc. (OTC BB: ETAK) released news that the company had successfully launched its first Mobile Virtual Network Enabler (MVNE) platform.  In order to ensure customer up time and performance, ETAK has partnered with T-Mobile in the Netherlands to utilize the telco’s antenna network for its proprietary media distribution platform.

How important of a role do MVNE’s play in the telecommunications industry?  MVNEs essentially are the vital support system for mobile operators. These outsourced solutions include:  Fulfillment & Distribution, Data & Content Management, CRM Services, Billing, along with several other services.

ETAK also projects to launch their second platform in Spain this upcoming January with the agreement to be forthcoming.  With these contracts in place, the company expects it can implement its business plan to reach profitability by the third quarter of 2009.  With the full suite of services which ETAK offers its clients, the company is positioning themselves to be a required industry participant for years to come.

With the release of this news, ETAK’s stock price has risen over 13% to $0.58. In evaluating its peer group of competitors, the company can be projected to be trading at $1.90.  This is a fast-emerging telecommunications company that offers a compelling investment opportunity for anyone interested in the small-cap market.

‘The purchase of this State-of-the-Art 3G Video Gateway and ViVaS software, which enables interactivity, 3G and Flash streaming for all kinds of (live) content, and our own compression technique, completes our product portfolio,’ said Martin Zuurbier, CTO and COO of Elephant Talk. ‘In combination with Premium Rate Services and Streaming Content, we believe we will tap new markets. Elephant Talk’s overall goal is to create a great customer experience, including live customer service agents, without investing in huge servers, CTI-applications and complicated configurations. The new solution supports a wide number of devices and operating systems, with unlimited voice and live video access regardless if the target audience is using a cell phone, PC or laptop.’

Mr. Zuurbier continued: ‘Watching a video or TV program, taking a call, participating in a live conference, dialing a number, contacting a customer service department, playing an interactive game, voting in a TV show, receiving instant information, making a video call — everything is possible through one single solution. The user-friendliness, time-saving functionalities and inviting interactive menus and visualizations make the solution accessible for all kinds of customers. Logging features will allow data collection from customers worldwide, and the overall service level will increase. And, most importantly, communication costs will be considerably reduced.’

In constantly moving forward to supply the marketplace with a wide range of solutions such as multimedia communications services, interactive voice and video portals (IVVR) and content applications (video on-demand or streaming). The new services will be accessible using a 3G mobile phone as well as a Flash-based Internet or PC application.

What does this mean for the future?  The proposed platform will enable Elephant Talk to expand its future offering with new services such as video surveillance and security, mobile to PC conferencing, video blogging and user-generated content video.

What would you say if I told you that there was an incredible investment opportunity in the telecommunications industry, with a solid company that is highly undervalued amongst their peer group?  Would you be interested?  You should be, wireless telecom resale and mobile Internet access are set to explode over the next two years and Elephant Talk Communications, Inc. (OTCBB: ETAK) is poised for a sharp increase in its revenue base.  The Company has already received over $25 million in funding since 2005 and anticipates positive cash flow at the end of 2008.

What is the model?

By combining fixed-line and wireless access services through contractual arrangements with an unrestricted number of first/last mile telecom providers, ETAK offers content, media streaming and traditional telecom services, SMS, Wi-Fi and VOIP. All traffic is supported by ETAK’s own CRM (Customer Relations Management) and CDR (Call Data Records) system for complete customer identification, billing and collection purposes. Consequently, ETAK is able to put its B2B customers in the driver’s seat by enabling them to operate as global telecom & multimedia distribution organizations. Supporting business processes such as fulfillment, logistics, and live customer care can be provided by third party suppliers with which ETAK cooperates.

ETAK’s distribution services of third-party content such as movies, ring tones and sports are centrally managed and integrated through a network of content management platforms strategically located in highly secured data centers around the world. Its network is based on fixed-line telecommunications licenses, mobile access agreements and network interconnections. ETAK’s robust network structure and content delivery platforms provide uptime performance of the highest standards.

ETAK’s geographical cross-border footprint, established through existing relationships with national telecom incumbents, is especially well-positioned for international traffic. ETAK has established its own facilities-based infrastructure in four continents. In the below map, black stars represent ETAK’s current points of presence, while the red ones reflect the Companies planned expansion in 2008.

When searching for the small cap companies to add to your portfolio, you need to consider Elephant Talk Communications (click here for investor profile). Elephant Talk is currently trading at less than one-half times their PE ratio. This is more than 60% below the industry standard price–to-sales valuation of its peer group. With their seasoned management team, unique systems integration technology, and international presence, Elephant Talk is primed for strong growth and upside potential.

See below for the RedChip VIP profile of ETAK:

Due to the peer group comparison along with the strong partnerships ETAK has made in the past 60 days, such as their contract with T-Mobile, RedChip has placed the target share price at $2.40 per share for ETAK.  They are currently trading around $1 per share, so this is a stock primed for growth, and you can be assured it won’t be undervalued much longer.

With every company, a strong and knowledgeable executive team is a prerequisite for success.  Below, you can review the bio for each ETAK executive.

Steven van der Velden
Chairman, President and Chief Executive Officer

Steven van der Velden has been associated with the Company since 2006. He has extensive experience in the fields of consultancy, logistics, real estate development, telecommunication, e-commerce, and investment management, along with successes in having started over a dozen companies prior to joining ETAK. He has also been involved in the foundation of E-commerce Park NV, where he helped to develop a 50,000 sq. ft. data center and Internet hosting facility. In addition, he served as CEO of InTouch Telecom SA/NV until it was sold in 1999 and was co-founder of ITA International Telemedia Association, a Network for Online Commerce. Mr. van der Velden is also involved in various ICT ventures throughout Europe, North America, the Far East, and the Caribbean. He has an MBA from Rotterdam School of Management and a master’s degree in Law from Leiden University.

Bruce W. Barren
Vice Chairman and Independent Director
As a recent addition to the Company’s board in January 2008, Mr. Barren also serves as Chairman of The EMCO/Hanover Group, an international merchant banking company. He brings significant multi-industry experience (including telecommunications) to the board, along with a background in management, finance, and marketing that contributes to ETAK’s IT and media content and management businesses. Mr. Barren, who has been honored by the White House and the U.S. Senate, plus the Government of China and the Central American Parliament, has been involved in more than 200 businesses in the media, healthcare, and industrials sectors on a global basis, including many in locations where Elephant Talk has operations. He holds graduate certificates in International Marketing and Finance from Harvard Business School and Cambridge University and also has a master’s degree from Bucknell University.

Martin Zuurbier
Chief Technology Officer
Mr. Zuurbier is Chief Technology Officer and director of ETAK. Mr. Zuurbier has over 12 years of experience in the telecommunications field, including his service as director and founder of Vocalis Telecom Group located in the Netherlands and Switzerland. This also includes his experience in building, maintaining, and operating a telecommunications network that spans eight countries in Europe. Having this background has benefited ETAK’s back-office billing and CRM capabilities. Mr. Zuurbier is also experienced in developing new switching technology, an experience gained while working on several collaborative projects with hardware manufacturer Dialogic between 1995 and 1999.

Willem Ackermans
Chief Financial Officer
Mr. Ackermans has been Chief Financial Officer and director of ETAK since January 1, 2007. He holds a master’s degree in Engineering from Dutch Technical University at Delft in the Netherlands and has rich experience in the areas of finance and administration as well as in Investor Relations and Mergers & Acquisitions. Mr. Ackermans is also a partner in M-Ventures B.V., a Dutch-based firm focusing on new business development and venture capital activities in the information technology, energy, and healthcare industries in Europe. Mr. Ackermans has served as Corporate Treasurer and Chief Financial Officer at KPN, a Dutch telecommunications company, where he was involved with various joint ventures affiliated with KPN. In addition, he has extensive experience with several entities listed on the European stock exchanges as well as on the NYSE and NASDAQ. His background also includes serving as CFO of Telemedia as well as serving as Director of Corporate Development and Strategy at NV Nuon, a leading energy company in the Netherlands.

Alexander Lancee
Chief Marketing Officer
Mr. Lancee has over 20 years of experience in the ICT and Telecom industry and has held senior positions at IBM and KPN telecom. He was actively involved in developing the distribution strategy, sales, and trading marketing transitions to B-to-C and B-to-B companies at KPN Mobile. In addition, he has also served on the advisory boards of various telecom- and software-related companies. He holds a BBA from the HES in The Hague.

We’ve talked about Elephant Talk earlier this week (coverage), and how they partnered with T-Mobile.  In this post I wanted to discuss how Elephant Talk, who trades at the symbol ETAK, is a key investment opportunity for anyone looking to get into the telecommunications market.

Elephant Talk (click here for the company profile) provides traditional telecommunications and media distribution services. The company is unique in the fact that they are the first entity to create and offer a streamlined network with “smart” switches on a global scale, with significant focus on systems integration, and a turnkey global distribution network. The company has developed a business with low operating costs that focuses on one network and a single layer of management. Elephant Talk’s global infrastructure is positioned in Asia, North America, the Middle East, and Europe. The company is set up as one global system that offers a prime advantage because it eliminates many of problems that are associated with international and cross-border telecommunications. In addition this platform accommodates easy international growth.

Elephant Talk is currently trading at less than one-half times their price-to-sales ratio. This is more than 60% below the industry standard price–to-sales valuation of its peers. With their seasoned management team, unique systems integration technology, and international presence, Elephant Talk is primed for strong growth and has an incredible upside potential.

Here are 17 reasons to invest in Elephant Talk:

Elephant Talk Communications, a telecommunications company that trades at the symbol: ETAK (click here for their company profile) announced the execution of a contract with T-Mobile Netherlands B.V. to enable Mobile Virtual Network Operators (MVNOs) in the country to operate voice and data services over the T-Mobile Network.  The agreement includes the deployment and operation of a fully featured 2G and 3G network.  What is a MVNO? The first commercially successful MVNO was Virgin Mobile UK, which launched in the United Kingdom in 1999 and now has over 4 million customers in the UK. Its success was replicated in the US. With this case study in mind, right now is a very exciting time for this fast-growing company.

Elephant Talk Communications is positioning itself as an international telecom operator and enabler/systems integrator to the multimedia industry by facilitating the distribution of all forms of content, as well as mobile and fixed-telecom services, to global telecommunications consumers. The company provides traditional telecom services, media streaming, and distribution services primarily to the business-to-business (B2B) community within the telecommunications market. Elephant Talk is also a systems integrator and developer for mobile telecom and content distribution solutions; and, as a Mobile Virtual Network Enabler (MVNE), the company has positioned itself as the premier outsourcing partner for both Mobile Network Operators (MNO’s) as well as for Mobile Virtual Network Operators (MVNO’s). Elephant Talk is positioning itself as the preferred MVNE partner of the larger, global Mobile Operators and currently operates sophisticated networks in over a dozen markets in Europe, Asia Pacific, and the Middle East.

ETAK has created a unique business model that is designed to provide traditional telecommunication (i.e., voice) and media distribution (i.e., streaming) services primarily to B2B customers and has developed a turnkey mobile platform that allows their client base to rapidly capture the explosive wireless subscriber market. The Company’s business model is targeted to attract and facilitate customers who want to enter the mobile market but lack the financial resources and/or technical capabilities to invest in the needed infrastructure. ETAK provides a one-stop shop proposition for its clients with integrated billing solutions and its low-cost structure serves to differentiate the Company from its competitors. We recommend this investment with a rating of “Speculative Buy” and a 12-month target price of $2.40.

Currently trading at a $0.80 share price, Elephant Talk is an undervalued stock and this is a great time to invest in this fast-growing company.  By achieving partnerships with global telecoms such as T-Mobile, Elephant Talk will be on the fast-track to success in the highly profitable telecommunications industry.  Steven Van der Velden, CEO of Elephant Talk, stated: “We are very proud because through this agreement with T-Mobile, we are ready to immediately offer our services as a full MVNE (Mobile Virtual Network Enabler) to the MVNO market in The Netherlands. As a matter of fact, a first MVNO has started their operations and several others are expected to sign up in the near future. This represents a fundamental milestone in our strategy to become a major player in the arena of the MVNO Enabler market worldwide.”

“The extreme flexibility and the comprehensiveness of our solution,’ said Steven Van der Velden, ‘allows us to setup and launch a new MVNO project in a matter of weeks, thus reducing considerably the barrier of entry for new starters.”