SMARTALK TeleServices, Inc. and its wholly owned subsidiary, SMARTALK TeleServices (U.K.) Ltd., announced today the signing of a definitive agreement with DCI Telecommunications, Inc. (OTC:DCTC) to purchase the right to distribute SMARTALK prepaid calling cards in the United Kingdom through D Services, a WH Smith business which specializes in news trade distribution. This agreement gives SMARTALK the potential to access to 55,000 retail outlets in the UK. Under terms of this agreement, SMARTALK will purchase DCI’s prepaid phone card distribution channel for $9 million, consisting of $8 million in SMARTALK common stock and $1 million in cash.
“The European prepaid phone card market is more mature and sophisticated when compared to the U.S. market where phone cards were introduced less than five years ago. In fact, Europe was an early launching pad for the worldwide market. We are proud to have the opportunity to distribute SMARTALK branded prepaid calling cards in Europe. We look forward to living up to the responsibility of introducing a high quality prepaid calling card that will be worthy of the WH Smith name,” said Robert H. Lorsch, SMARTALK’s Chairman and CEO.
Michelle W. Fess, SMARTALK’s Vice President – International, added, “We are delighted to be partnering with a high caliber, `blue chip’ partner such as WH Smith. We believe that D Services’ solid reputation and proven distribution capabilities will provide us with a competitive advantage in the UK market.”
Trevor Martin, General Manager of D Services, said, “This is an exciting opportunity to continue our work in developing the UK phone card market and we look forward to working with SMARTALK which is one of the largest providers of prepaid calling card products in North America.”
SMARTALK manufactures and distributes prepaid calling cards and other enhanced telecommunications products which are sold at retail and marketed to advertising and promotional clientele. SMARTALK maintains distribution agreements with mass merchandisers, consumer electronics retailers, supermarkets and home office superstores, such as Office Depot, Future Shop, Venture Stores, The Good Guys, Staples, Service Merchandise, Jewel/Osco Combo Stores, Osco Drug, Sav-On Drug, OfficeMax, Dominick’s Finer Foods, Eckerd Drug, Food4Less, Ralphs Supermarkets, Bradlees, Marshall Field’s, Best Buy, and Builders Square, as well as university book stores and convenience stores nationwide. SMARTALK also offers specialized value-added promotional phone card programs to corporate clients including Gillette, Hewlett-Packard, Wells Fargo Bank, Nabisco, Pfizer and Prudential Securities. The Company maintains strategic marketing partnerships with Choice Hotels and HFS, the two largest hotel franchisers in the US, along with Simon DeBartolo Group, the largest publicly traded real estate company and operator of shopping malls in North America.
Based in Los Angeles, with additional offices in Boston, Orlando and San Francisco, SMARTALK is a member of the Telecommunications Resellers Association, International Telecard Association and the Consumer Electronics Manufacturer’s Association.
Note: Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform act of 1995. Such statements include, but are not limited to, the ability of the Company to complete the transaction with DCI Telecommunications, Inc. which is subject to certain conditions, including, among others, the ability of the Company or its wholly owned subsidiary to enter into a new contract with WH Smith which is in form and substance satisfactory to the Company’s subsidiary. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, risks related to receptivity of retailers’ customers to the Company’s products and services; market acceptance and consumer demand for the Company’s products and services and pricing dependence on third-party vendors. The Company’s agreements with its distributors generally do not assure that the Company will generate a specific level of revenue and are terminable on relatively short notice. Investors who seek more information about the Company’s business and relevant risk factors may wish to review the Company’s SEC reports, including, but not limited to, its Annual Report on Form 10-K for 1996, and quarterly reports on Form 10-Q.Details