Now that I had my (repeated) rant about Winnick's dealings (bless the two dog houses with fountains at his new residence), I would hopefully be able to respond to the question which I have turned in my mind for several weeks and which Gruetz formulated in the reference post. Or at least I will relate what I consider my own perspectives WRT this question about the shifting playing field with the impending "consolidation" (i.e. cannabilization) of the many players.
Ally, thanks for the dissection of the debt structure of GX, it does substantiate the present claims for available funding for GX from what I can see.
First I would place management at the top of the investigative structure, then the network capabilities (technology is not top dog, management is, in my view).
LVLT has good management, it is their business model which I question. Others, with a higher likelihood of failure than LVLT (which I do not view as likely to fail, only likely to be acquired or seriously modified to stay afloat) we can only assume will be an assets-only acquisition, leaving their management to find work elsewhere (with Hindery?). Do any of these players that would acquire these Chp 11 assets run traffic over GX? Will their acquisition of these assets impact GX revenue-model WRT signing up new subscribers of bandwidth?
When these bandwidth deals are arranged, there is apparently a sizeable investment to set up the system to run over a particular carrier. I would expect the costs are sufficient to prevent too much hopping around, as well as contractual arrangements to prevent hopping around from one carrier to another. I think we are mostly dealing with attracting new customers when considering how the failures of some MNOs will impact GX. My biggest concern would be for the failed MNOs' shedding of their debt load, thus allowing an edge in pricing against the GX model, but is this realistic? Will the bondholders allow these assets to go out the door so cheaply? Are these bondholders *possibly also* bondholders in other MNOs? I think they probably are. I think some of these bondholders may even be some of the incumbent big names hedging their bets against these startups' possible intrusion into their turf.
Remember when FRO and USWest were contracted by GBLX, and then QWEST decided to bid for FRO and USWest? I heard it was SBC that put the money up for Q to go after these two targets, in an effort to wrest them away from GBLX. Later, we see partial validation of the perceived threat when SBC goes head to head with GX in the NAP (Network Access Point) battle in S.Florida. SBC wanted to construct a NAP in two locations and charge by the bit, while GX wanted to construct a NAP in one location and install a consortium of about 40 players into that NAP and lease the deals, not bit by bit...while SBC had two major players: WCOM and Qwest to offer as tenants and subscribers of their NAP...I believe, but do not know, that SBC has since abandoned their efforts...Just Another Example of how slick GX management is in First Mover Advantage.....SBC is HUGE in S.America (the source of the need, along with the Caribbean) for the NAP...the then-current NAP being Maryland, a tremendous congestion-point for traffic (is this not where MAE West and East originate?) [think: USGov traffic]. Anyway, we see how GX is overcoming the opposition of the big $$ time and again, but this could change with more of the fibre in the hands of the wealthy conglomerates after any consolidation.
But for whom will the Belles Toll here, the CBOE? Goldman Sachs? No, the financial sector appears to belong to GX, and as an old-hand at being successful told me once: In Business, don't change from a Winner. They won't be shopping elsewhere any time soon (besides, aren't these the same folks who get the grease for sliding past all these nifty bond-deals Winnick likes to propagate?<g>wink, wink, nudge, nudge...)
Moving along, what will become of the revenue models for GX with an altered (not neutered, just altered) playing field?
I think the market is *so huge* and so new, that the first mover advantage in this case will create newer demands by the big guys out there already on GX system. The same fella that told me not to change from the Winner, was in a position during the Economic Downturn in '89 and '90 that as that downturn started easing, they started asking me to do more work for expanding their facilities (I had only primo customers for Mechanical Work in Miami, the top names in the fresh produce and restaurant//cruise-ship supply sector dealing with perishable items--seafood, vegies, meat, sprouts, etc. This was *processing* those items, not simply storage and transport of those items)
All the lesser competitors were shaken out of business, and those buying from those lesser competitors now came to my customers for reliable sourcing...hence I was asked to start submitting bids (what a JOKE!! my bids were *always* 30% higher...because I offered the REAL McCOY, the gear that worked and had redundancy...and my players would not ever switch off of my services because I could *always* point out the differences in the bids, the gear, my concept of redundancy (this made it easier for me to service their installation, put another unit on-line and repair the failed system...at my leisure, less emergency work...) I *never* hit a price-point client, they were a pain in the butt to work for, they were the ones difficult to receive payment from, they wanted cheap? go to the next guy, not me...and in Miami, there are plenty of sources for cheap work...I did not compete with a price point in this niche field for those who needed high QoS...seafood is not cheap to buy wholesale, and when it spoils, it cannot be sold, so just tack that onto the price of the work those others performed, and eventually that would have bought my services, without the headaches of partially spoiled product, haggling over who is responsible, blablabla..) Do you now see the reason I think so highly of GX business model? I have lived that model, and when the going gets rough, the well-heeled players keep on truckin', and when the going improves, the well-heeled players gobble up the competition and asked me for more work...will this fibre-sphere be any different? Only Bigger, IMO. And everything here is only my opinion, I want to hear comments before I carry on further. Besides, I must go into town (SLObispo, Morro Bay is not much of a place to shop, really).
I will try to think further, but I need some more ideas about what could be a problem for GX. The failed MNOs, once they are acquired by other players, will offer alternatives to GX bandwidth, but will it offer real competition to the GX targeted customers?
end part 1
PS: a question just came to mind: how can a company easily utilize more than one MNO for their needs? Techies would need to help me on this one...can a company, say, readily employ more than one MNO? Technical issues as well as volume-sales issues would be involved...
Later,
Martin Thomas |
