Appreciate your response. However,' I'll have to disagree with you here. (Point of clarification - the 1100 CLECs I refer to are largely the recent start ups - not the old ILECs are they have been referred to traditionally.)
The original big guys (Teleport and MFS) grew up in what I'd call the "luxury phase" - i.e., when the big guys (ATT, MCI, Sprint) weren't/couldn't pay them too much attention. The RBOCs - well, if they were awake, they would have noticed them (but that's a differnet story!). Now that the big guys are getting in to this business they will push hard with B2B as well as Residential customers coz. they'll want to control the last mile. And in this age of major shortage of customer care reps and high levels of investments required for customer care systems, they will run over these smaller players.
Also, I'll disagree with your statement about the newer players going after new markets. What new markets are you referring to here? The way I see it, it's basically an old market which is quite saturated in certain segments such as local service, LD, maybe even cable and I can see wireless getting there pretty soon. However, the new business model is what excites these entrenched players. Take AT&T for example - in the past, a valuable customer to them was a $75/mo LD customer. So, they had about $15-20 to play around with in terms of marketing/selling efforts. Now suddenly AT&T has wireless, internet access, cable, LD and local access (either through TCI or AT&T Wireless) to offer - this $75/mo customer becomes a $200+/mo customer. Not only can they get to 'own' this customer quickly, but also hold on to them with more disposable $ to play with. And the big factor is acquiring the customer early on since it has been found that the cost of grabbing someone else's customer is significantly highly than retaining your existing customer (and we know that they big guys own most of them). Basically, it boils down to a disposable $ game.
Now figure who has the most. So, how will the smaller players manage to succeed in this environment? Only a few players such as NXLK, USN and maybe QWST will manage to make it through this. For me, IDT is on the fence. Let's see how they execute. |
