Lepton

	Lepton
	Cable Television Company Seeks Investors

LEPTON is a technology firm, based in L'viv, Ukraine, which specializes in scientific and industrial projects. There are three partners who speak English, German, Russian, Polish, and Ukrainian.

The principal activities are designing and producing microwave devices, television and radio equipment, as well as developing, operating and maintaining cable nets for individual residential and commercial buildings and for large cities. LEPTON was founded on April 12, 1991 and currently has 26 employees including 16 engineers. It has accumulated much experience in its field by completing more than 60 large and small projects, including installation of cable service for the Ukrainian President's official residence in Kiev. While these projects have been by government contract, the project is to be privately funded.

Project Description

To design, construct and maintain a state-of-the-art microwave video distribution system (MVDS) for the following cities:

Lviv
Truskavets
Stebnyk
Drohobych
Ivano-Frankivsk

Description of the Problem

The new republics of the former USSR, including Ukraine, are lagging behind other countries in the development of cable television. Presently there are only 10 TV channels, broadcast in the VHF band, which makes further development impossible due to no more available channels. Because the current cable nets lack an interactive channel, servicing the systems is limited. With present techniques it is impossible to lay cables to many inaccessible buildings in cities, thus limiting the number of people who can receive cable provided information. A basic element of society reform, however, includes full access to information and the possibility of information exchange between citizens and the administration.

Stages of Development

The licenses for implementation of the project in L'viv and Truskavets have already been obtained. Further steps include:

In the first year: develop a computer program to design the system, design the cable networks for L'viv and Truskavets and design the microwave radio links and increase the LEPTON work force to 50 employees.

In the second year: install the cable networks in L'viv and Truskavets, including all necessary microwave radio links.

Expected Results

The completed program will immediately improve the information infrastructure in L'viv and Truskavets, which will not only substantially increase the information flow to subscribers, but also afford an interactive capability. Further development of the net will provide Internet service and expanded interactive services to include polling of the population. The solutions for the successful installation of a modern MVDS in Ukraine with its special challenges will result in the ability to go into serial production of domestic microwave radio links.

The project will modernize and expand the cities' information infrastructure to include television, radio and telephone communications. The aged Ukrainian communication infrastructure is not technically capable of providing fast, multifaceted information to the people of Ukraine. Therefore, extensive redesign and construction of a modern MVDS is necessary. The MVDS will provide greater opportunities for Ukrainians to have current information by:

Increasing the number of TV channels and radio stations;
Exchanging programs between separate cable nets of the cities;
Expanding service to more residences.

The MVDS will also be interactive, that is, permit the subscriber to provide information back to the server. This interactive capability permits a subscriber the following options: to issue a fire-alarm or other emergency signals, to have two-way telephone communications, to signal the status of the cable net, to open coded locks for doorways, to show the status of lifts and to read home utilities consumption. The MVDS will also enable the fast and extensive creation of cable nets throughout Ukraine.

Proposed Solution

New methods of designing, constructing and maintaining an MVDS by will considerably improve the information infrastructure in the cities and will include:

1. Installation of a cable system in the UHF band to enlarge the number of possible channels. This will require adapting the standard.

2. Development of a computer program to design TV nets to optimize cable net planning. (Computer aided design).

3. Creation of an interactive capability for the cable net.

4. Creation of a wide-band microwave link to provide radio transmission of cable TV signals for 300 to 400 meters. This will transmit TV cable signals to remote neighborhoods which normally are difficult to reach and will permit the integration of programming of separate cable systems as well uniting several cable nets in a large city into a single system.

Funding

LEPTON is applying to the EUROPABANK for a loan to finance the MVDS project in L'viv and Truskavets. The estimated cost is 900,000 ECU, which are broken out as: :

Design: 180,000 ECU

Materials, Accessories and Equipment: 490,000 ECU

Installation: 230,000 ECU

It is estimated that, upon granting of the funds, the project will be completed in two years. The expected return then will be 30 to 40%. LEPTON will set up a collection system with the subscribers to the MVDS.

To ensure maximum efficiency in the implementation of the project, additional technical assistance has been secured from the German firm WISI for the design and installation of the cable nets, as well as for provision of the accessories and equipment, for the instrumentation of the UHF band and microwave radio link, for the modification of equipment to meet Ukrainian standards and for the adaptation of computer programs to design the nets.

Business Offer

The technology firm LEPTON was founded in April 1991 as a company with limited liability. It is owned by three General Partners who manage the firm. LEPTON specializes in the development, creation and servicing of television add radio transmission nets. This includes active and passive cable networks as well as stations for receiving satellite transmissions. It is one of the most experienced firms in Ukraine in the area of designing and installing television cable systems. Presently the firm has 24 employees. Many of the 15 engineers who work for LEPTON were employed in a scientific research institute which was part of the defense complex in the former Soviet Union. The engineers have broad experience in developing systems using high frequency equipment. Market research conducted by LEPTON shows a high demand in Ukraine for cable television offering a large choice of channels.

Currently there are three state television channels in major cities and, depending on the region, two or three private channels. In small towns, the selection decreases to two or three ether television channels. Satellite television is not developed widely in Ukraine because of the weak satellite signals in Eastern Europe. Satellite reception in central and eastern regions is practically impossible.

Because of the present low income levels, the population cannot afford to purchase expensive, more efficient reception devices. Therefore, there is an extremely high demand for reasonably priced cable television service in Ukraine. To satisfy this demand, LEPTON has focused on cable nets. In addition to cabling the nation's presidential palace in Kiev, it has already constructed 40 small nets of a capacity between 500 and 700 customers and is now working on very large city cable networks. Presently the firm has under construction a major TV network in L'viv, the principal city of Western Ukraine. Upon completion, the net will serve more than 15,000 customers.

LEPTON is constructing a cable TV net in the city of L'viv (area Zboishcha-Zamarstyniv, 21,500 potential customers). Completion date is planned for December 1999. LEPTON is also constructing cable TV nets in the towns of Truskavets and Stebynk not far from L'viv (Total of 11,000 potential customers). Planned completion date is April 2000. Negotiations have begun to build cable TV nets in Drohobych (15,000 potential customers) and Ivano-Frankivsk (45,000 potential customers). LEPTON will initially offer 15 television and 4 radio channels with the capability to expand.

The cable television market is huge in western Ukraine with the large cities of Ternopil', Luts'k, Rivne, Volodyrnyr-Volyns'kiy, Uzhgorod, and the smaller towns of Striy, Drohobytch, Boryslav, Stebnyk, Mykolaiv, Mukachevo, Chervonohrad and others having no or only limited access to cable television. In the next five years, LEPTON is planning to increase the number of installed cable connections to more than 120,000.

LEPTON wants to meet the challenge and the partners feel that they have a unique opportunity. They are a young, yet already experienced firm, breaking ground in the dynamic industry of information services in Ukraine, one of the emerging democracies of the former Soviet Union. To maintain the leading position in cable communications, LEPTON requires capital to meet its goals. Investment is welcome in any form: JOINT VENTURES or PARTNERSHIPS.

Currently 1,500,000 US Dollars are needed to proceed with the planned TV cable nets. The estimated construction period is two years. Based upon experience, the return on the investment is between 30 and 40%, indicating that the investment will be recouped in 23-2 years after construction is completed. Thereafter, profitability of the network should range between 40 and 45% annually.

Contact: Mr. Pavlo Kashkadamov, General Partner (speaks English and German).
Postal address: 22 Patona Street; PO Box 2082; 290040 L'viv; Ukraine
Telephone / Fax: (380) 322-620092
Electronic mail

Additional Contact (English Speaking): Mr. George Finley
Postal Address: George Finley
151 Tremont St Apt 12P
Boston MA 02111; USA
Telephone / Fax: 617-423-1954
Electronic mail