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Technology Stocks : Genuity, Inc. (GENU)
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To: Softechie who wrote (99)10/24/2000 1:08:06 AM
From: David Wiggins   of 456
 
Not to belabor a point, but Genuity is primarily an ISP, not purely an ITSP. The baggage is the huge amounts of debt and spending needed to build and maintain their network, and yes, their other businesses (which may be more or less profitable than VoIP.) ITXC has no debt and will need no further capitalization and has 250 million or so in the bank.

I'll agree that Genuity's network will always have the potential to be higher fidelity, but once it is good enough, does it really matter? At that point the return on being better is diminishing, but the cost of maintaining it is still there.

Your point about internet telephony being easy is theoretically correct. Genuity doesn't need to own the pipes to offer telephony, but they offer telephony because they own the pipes and they can do it. This also increases their fixed costs. If telephony was all they wanted they should sell the pipes and use the proceedes to pay for an internet telephony setup. Then they would be starting from scratch on managing quality over the public net which is not so easy as well as setting up the gateways etc. Both of these facors would put them behind ITXC

As it stands they are probably higher quality and definitely higher cost, the the higher quality may be largely irrelevant if ITXC's quality is good enough. It has proven to be good enough for phone to phone. Web to phone is undecided. Time will tell.

Regards, Dave
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