Real World Headaches with ALGX
I recently noticed ALGX stock has bounced out of the death spiral so many other Telco companies have suffered from. Most are guilty of the same thing; overbuilding overlapping systems, and over financing based on overly optimistic projections. New price target $8? A Billion in debt refinanced? ALGX paying cash for other Company assets? While you are trying to make sense of the press and technical numbers, I will just share with you my Real World dealings and observations with ALGX over the past 6 Months.
ALGX benefited this past year from the failures of NorthPoint, Rhythms, Worldcom, as DSL customers migrated to the cheap T1 solutions ALGX provided. In the Northeast, Verizon was too busy at the time laying off 20,000 people, and pursuing other cost cutting measures to compete. That was 6-12 Months ago, so let's discuss what is going on now in the Northeast T1 market.
While ALGX marketing is pushing their CLEC services to anyone who'll resell them, and buying up whatever fire sale facilities compliment their own, ALGX's production department is suffering from understaffing, and integration problems of old and new equipment. I know this because I am a T1 customer of both ALGX and Verizon. My company has several Branch offices that MAN to the main office using VPN's over T1 lines.
Dealing with ALGX continues to be the biggest nightmare of my IT career. I have documentation going back 6 months of outage after outage that are all attributed to ALGX's mishandling of my T1, and other T1's in the New York Metro area. Here are the highlights of some of the problems we have suffered recently;
an ALGX T1 buildout at a local CO was being sold by the Reseller, then later cancelled by ALGX
an ALGX Router could not handle Jumbo-IP packets, so we could not surf 75% of the Internet.
an ALGX Router not programmed properly, so an 11-hop VPN went to 21-hops
an ALGX Router conflict caused high packet count dropping, so T1 very sluggish
an ALGX Router group not upgraded together, so T1 suffered intermittent outages
an ALGX Technician stole part of our working Static IP Block, and gave it to another new customer
an ALGX Router conflict made us change our DNS Server around multiple times
an ALGX "Attack" is their way of blaming their incompetence on "Hackers" they claim brings down their systems from time to time.
Many of these incidents took Days and Weeks to resolve!
What aggravates all these problems is how most ALGX resellers do not even have access to ALGX's old network. They basically log your complaint, and sit on hold to ALGX, waiting for support to pick up. On many occasions ALGX initially blamed the last mile provider (Verizon) wasted money dispatching them, only to later find that it was actually an ALGX mis-configuration problem, and the last mile was fine.
I have worked with nearly a dozen different Business ISP service providers over the past four years, and I have never encountered one as mis-managed and irresponsible as ALGX when it comes to maintaining T1 connectivity. By the Fall, my contract will be up, and I look forward to switching over to COVD or Verizon. What is really hurting ALGX is how much more competitive Verizon has become just in the past few months. Verizon now prices there 2-year T1 contracts as low as a comparable ALGX solution, and Verizon has changed their Sale and Support point of contacts to small dedicated teams which are much more responsive then they were last year. Verizon also monitors my T1 with Genuity's help, to be much more proactively then ALGX can. So Verizon notifies me when there is trouble with the T1, not like the hours I spend per incident convincing ALGX that I am sufferring from problems on their own system. Another potential competitor on the rise are Cable Modem system providers who are packeging special service and support for the Business market, while promising higher performance at lower price points then T1 can ever provide.
I was going to post this on DSLReports.com, but I was afraid it would hurt my T1 reseller(MegaPath), who has worked hard to mitigate these problems between my company and ALGX. So I posted this here to the benefit of the investment community who are looking for Telco crash survivor's to invest in. Personally, I would play ALGX very close to the vest by taking any gains off the table quickly. To me COVD looks more like a relatively secure longer-term telo survivor play. |
