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Technology News
Sun, 21 Feb 1999, 9:03pm EST
RCN Corp. Hopes to Unseat Telecom Giants With Triple Service
RCN Corp. Hopes to Unseat Telecom Giants With Triple Service
New York, Feb. 19 (Bloomberg) -- RCN Corp. Chairman and
Chief Executive David McCourt said offering cable-TV, telephone
and Internet service to homes via one network will help his
company win market share from much larger competitors including
AT&T Corp., MCI WorldCom Inc. and Bell Atlantic Corp.
The Princeton, New Jersey-based company's triple approach
gives it an edge as most of its competitors only offer two of
those services, McCourt said.
''The telecommunications industry is going through a sea
change,'' McCourt said after he won the entrepreneur of the year
award from the Harvard Business School Club of Greater New York,
the first time the award was given. ''The incumbent provider
never becomes dominant.''
The company is building fiber-optic networks to deliver its
services to homes in the major cities it serves, including New
York City, Boston and San Francisco, hoping to profit in these
high-density regions. RCN is focusing on these areas because it
can reach more clients there with one fiber optic cable, than it
can in sparsely populated rural and suburban areas.
''Forty percent of telecommunications traffic in the country
is concentrated in 6 percent of the U.S. geography,'' McCourt
said.
Raising Money
RCN said in a government filing Feb. 1 that it will sell as
much as $1 billion of debt and equity to fund operations and meet
general corporate needs. McCourt declined to give further
details.
He said he doesn't expect the company, which he founded in
1997, to make a net profit for six or seven years. For the year
ended December 31, RCN lost $48.5 million before interest, taxes,
depreciation and amortization, almost seven times the $7.9
million it lost the previous year. Still, revenue rose 92 percent
to $245.1 million.
The company, the sixth-largest U.S. Internet service
provider with 500,000 customers, hopes that combining the four
online units it bought in the past year under a single brand
name, using RCN's own fiber optic network, will help it nab a
bigger share of the booming market for Internet service.
Other finalists for the Harvard Business School Award
included privately held Biztravel.com, CD Radio, TheStreet.com
and StarMedia Network Inc. The Harvard Business School Club of
Greater New York, a New York area business association, has more
than 1,200 members. This year's HBSC/NY Entrepreneurs' Conference
and Awards was the first such event held by the club.
RCN slipped 1/4 to 24 1/2. |
