Large Investors Boost Franklin Telecom

Franklin Telecom in Westlake Village announced that an institutional investor has acquired convertible preferred shares of the company for $2 million.

This investment, which will involve up to 500,000 shares, is in addition to a similar $5 million private placement by another investor that took place in October.

The funds will be used to develop additional features for the Tempest, Franklin’s new Data/Voice Gateway, which allows companies to communicate by telephone using the Internet instead of conventional long-distance phone lines.

“We now have Tempest deployed in five cities in the U.S. and Canada,” said Frank Peters, Franklin’s president and chief executive officer. “This test network is delivering consistently strong voice quality in daily usage. With all systems go, it is great to have the financing in hand to continue our national roll-out and to lay the groundwork for the overseas deployment we will begin during 1998.”

Helen West, corporate secretary for Franklin, said the Tempest can be used by multinational corporations that want to reduce their long-distance telephone costs by installing it in their own inter-company phone systems, or by companies that want to subscribe to Franklin’s telephone system.

The Franklin system will be in place in 125 U.S. cities within a few months, West said, enabling subscribers to make telephone calls to 85% of the nation at greatly reduced rates.