Big Disclaimer:
The following is text derived from Analyst's Jim Creamer's ARCC report dated January 24, 2000. Where a [ ] appears, I have updated the information. I have collaborated with Jim on several small cap stocks and believe him to be focused, succinct and insightful as well as unbiased. If you would like further information on this fine analyst or his firm please visit ebisc.com.
BEGIN JIM'S TEXT
Allied Riser Communications Corp. is a facilities-based provider of broadband data, video and voice communications to small- and medium-sized companies in the United States. The company was founded in 1996 and has aggressively grown over the last year by designing, constructing and owning state of the art fiber-optic networks in large commercial office buildings. With their standard service offering 10 Mbps (10 million bits of data per second), these fiber optic networks offer significantly higher bandwidth than standard dial up service, DSL, cable modems or T-1 circuits.
Focusing on this niche, Allied Riser is able to concentrate its efforts on providing products such as ultra-high speed Internet access, business-oriented television directly to desktop computers, enhanced conference calling and other broadband services designed to help their customers remain competitive in the evolving technical landscape. The company also uses their network to design wide area networks and virtual private networks to connect client's various offices with each other.
One of the most compelling aspects of Allied Riser to date has been their ability to capitalize on their relationships in the real estate industry and to sign long term contracts with over 1,100 [1200 buildings as of 2/3/2000] large commercial office buildings representing approximately 360 [400 as of 2/3/2000] million rentable square feet of office space and encompassing 50 large U.S. markets. The company intends to have networks completed and operating in buildings comprising over 325 million square feet by the end of 2000, and as of December 31, 1999, they were ahead of schedule with 120 buildings completed representing over 80 million rentable square feet in 22 markets.
The markets where Allied Riser currently has buildings in operation are:
Atlanta, GA Los Angeles, CA Philadelphia, PA
Austin, TX Miami, FL San Francisco, CA
Boston, MA Minneapolis, MN Seattle, WA
Chicago, IL New Orleans, LA Stamford, CT
Cleveland, OH New York, NY Tampa, FL
Dallas, TX North New Jersey Tulsa, OK
Denver, CO Orange County, CA Washington, D.C.
Houston, TX
[On 2/3/2000 ARCC expanded its presence in major markets across the United States by signing agreements with eight more real estate companies in New York, Atlanta, Philadelphia and 22 other markets.]
Allied Riser is well financed after raising $117 million in private equity funding, much of which came from leaders in the real estate, telecommunications and financial industries. They raised an additional $280 million with a public equity financing in October 1999. As of December 31, 1999, the company had cash and investments of over $314 million, of which more than $150 million is slated for the network construction scheduled for the remainder of 2000.
END JIM'S TEXT
In addition to the above mentioned folks should pay particular attention to the following:
- Secured right of ways . . . remember the run up companies like LVLT and QWST were accorded on this basis alone. It is not to be discounted. There is a battle brewing in the “last mile” access that we should discuss on this thread.
- First mover advantages . . . hardly anyone will be nuts enough to come in expend the necessary funds to lay a competing fiber in the risers of a building.
- Quick rollout of sites and services
- Strategic Real Estate, Technology & Service Relationships . . . here is an interesting service relationship with the folks at QWST: biz.yahoo.com. I have my own theories why QWST is pursuing this . . . a good topic for further conversation on the thread.
Also it should be noted that these folks are really doing something special. THEY HAVE BIG BANDWIDTH NOW. With up to a Gbps, they can really fill up the broadband pipes. While many of us have spoken about fantastic applications on the GBLX thread, anyone showing up to an ARCC deployed building looking for a glass of water will instead get a fire hose in the mouth.
The future is now. Broadband to the curb can not be competed with by the likes of wireless, DSL or anything else. These folks will be rolling in revenues to the best of my estimation.
Let's have fun discussing this one. |
