Technologically, there's no fit between RCNC and the Bells - RCNC is cable, Bells are xDSL. However, there might be a fit with AT&T if:
1. RCNC's footprint complements those of TWarner and TCI - can someone verify please?
2. If RCNC is able to ramp up and grab a ton of clients quickly, then they become a target not for their network, but more for their customer base.
Their business plan is most excellent - grab a ton of customers before anyone else does, keep infrastructure costs low by concentrating in high density population areas, etc. It's about 5 times cheaper to hold on to a customer than to acquire someone elses. The telecom industry has moved into a new paradim of single servies to bundled services - so, basically, RCNC is offerig customers a new service and so is really not acquiring someone else's customer. They are taking first time customers on. Anyone else entering the marketing with competing offers (high speed internet access, cable/satellite service, local and LD calling) will need to spend major bucks to acquire RCNC's customer. So, a buy out price will be somewhere between RCNC's cost to hold on to a customer and what it would cost to get an RCNC customer to switch. If RCNC offered lously service, it wouldn't be difficult. However, from everyone I talk to, they offer excellent service.
In the wireless market, customers were valued at $500-1200 each at acquisition time. And these were customers spending $60-75/mo. RCNC's customers must be spending more than that - so, we're talking about $800-1800/customer - depending on the economics. Now figure how many customers they'll have over the next couple of years - then figure out the value.
Can someone here build a model please? I'm too swamped for now....but could always provide some feedback to the model. |
