CYBD Cyber Digital Inc (CE)

Cyber Digital, Inc. (OTC BB: CYBD), today issued the following letter to its shareholders. -0- *T Dear Shareholders: The future is Digital Broadband World. And, for the first time in our history, market opens for our advanced digital voice and broadband IP (Internet Protocol) switches in the U.S. for the creation of 'last mile' local switching networks. Thanks to Federal Communications Commission's (FCC) recent rulings that favor our company. While, our stock price does not reflect any impact of such rulings on our company's market potential or the value of next generation technologies that we have developed, perhaps due to the fact that we are an unknown entity, we are ready to change that. We are excited about our future for a number of reasons: First, FCC disallows long distance carriers (LDCs) and smaller service providers, known as competitive local exchange carriers (CLECs) and Internet service providers (ISPs), to lease the local switching networks from the Bells, at government cut-rate prices, in order to serve their customers. Currently, the Bells own almost all of the local switching networks that connect businesses and homes. FCC wants LDCs, CLECs and ISPs to build their own local switching networks for providing voice and broadband data services to their customers. This has created a multi-billion dollar local switching market opportunity for us. Second, our industry is consolidating, creating merger and acquisitions opportunities for us. Those entities that do not want to build their local switching networks have no choice but to merge with those that have it or merge with those that have the technology, such as Cyber Digital. For instance, AT&T merged with SBC, and MCI with Verizon. Our strategy is to acquire those CLECs and ISPs who do not want to build their own local voice and broadband data switching facilities despite the FCC's recent local switching phase-out ruling. While these CLECs and ISPs are, generally, excellent marketing companies and have already established a customer base, they lack the technical and network engineering aspects of building and maintaining local voice and data switching facilities, which are among our core competences. These companies totally rely on the Bells for their local switching needs and currently, face erosion of their customer base due to FCC's recent rulings. We intend to acquire rapidly as many small to medium sized CLECs and ISPs that are privately owned. Our objective is to roll-out our local switching services nationally, which will take many years even through acquisitions. Third, CLECs and ISPs currently lease 17 million lines for $4.5 billion per year from the Bells, creating an immediate opportunity for us to acquire those that will benefit us. By deploying our systems, we substantially reduces CLECs' and ISPS' cost of leasing local switching facilities and improve their profitability as well as ours, while they provide us with instant customer base. In anticipation of this market opportunity, we signed an agreement with Level 3 Communications who will provide for global voice and data termination services to all traffic generated on our local switching systems. We will wholesale our services on recurring basis for local, long distance and international calls as well as broadband Internet access, VoIP and VPN services. Fourth, our advanced digital voice switching and broadband IP infrastructure switching systems are based on our proprietary operating system software, which provides high performance, reliability and functionality. We regard our software technology and certain components of our system hardware as proprietary. We believe the development of comparable systems would require hundreds of millions of dollars and take several years to complete, therefore diminishing the threat of new competitors in our markets. Fifth, the acquired CLECs and ISPs create service provision entities that use our advanced voice and broadband IP switching systems further diminishing competitive threats and significantly improving long term profitability and viability. We believe that our advanced digital voice and broadband IP switching systems are ideally suited for the creation of next generation 'last mile' local switching networks and that it will greatly enhance the value of our company. Our vast array of both digital voice and broadband IP systems will provide a diverse revenue stream as well as solid growth prospects in the future. We have recently secured significant funding support from an institutional fund, which will allow us to substantially grow our business through acquisitions as well as organically over the next several years. Simply put, our intrinsic value of our technology and our market potential value created by the recent FCC rulings in our favor are not yet reflected in our stock price. We are ready to change that. Sincerely, J.C. Chatpar President and Chief Executive Officer P.S. Please send your request at investors@cyberdigitalinc.com to receive updates by email. *T About Cyber Digital, Inc. Cyber Digital, Inc., is a leading designer, software developer and manufacturer of a range of advanced distributed digital voice switches and high-performance Internet Protocol (IP) broadband systems, such as softswitches, routers, gateways, firewalls and servers for network operators worldwide. For more information, visit www.cyberdigitalinc.com This press release contains forward-looking statements, pursuant to the "safe harbor" provisions as fully described in Cyber's SEC filings.