Virtual Satellite Becoming Reality

Bob Friedman, chairman and CEO of Virtual Satellite Corp., said he will travel to London, England, in September to meet with satellite broadcasting providers about a future deal with his Fayetteville company.

He declined to disclose the name of the broadcasters involved, but Friedman did say by Oct. 7 an investment subscription agreement to provide $3 million in capital for VSC should be completed. Twelve local venture capitalists signed up for an investment plan last year that required certain contributions up front and offered incentives to participate in a second round after early testing.

VSC successfully tested its prototypes and patent during the winter. Now the second round of money will be used for final testing, integration and design and to secure manufacturing agreements.

VSC, which incorporated in February 2001, uses proprietary technology to combine unused transponders on geostationary satellites and thereby create higher power “virtual” satellites. By 2004, the company intends to put the equivalent of additional “birds” in the sky without incurring the $300 million cost of launching a satellite.

Friedman said his business model includes the sale of about 7 million virtual satellite system units over a five-year period. The in-home systems will cost about $200 each, and Friedman expects to sign up more than 1 million subscribers in VSC’s first year of broadcasting.

Friedman, who is also director of the University of Arkansas’ Genesis Technology Incubator, said several entities — including a government agency, private corporation and direct broadcasting company — have expressed an interest in using VSC’s technology to enhance their own systems. He declined to name the interested firms, but entertainment, communications and military applications are all possible through the product.

A VSC investor meeting is set for Sept. 28. Friedman said he hoped to update investors on his London trip at that time.

VSC’s investors, organized as Northwest Investment Group LLC, include UA Athletic Director J. Frank Broyles, Athletic World Advertising President Gregg Ogden and prominent developers Jim Lindsey, Mark Marquess, Vic Evans, Gary Brandon and Greg House.