To: Frank A. Coluccio who wrote (379 ) 4/24/1999 12:16:00 PM From: HVN Read Replies (1) | Respond to
Frank, I doubt that really matters (I believe they have both - depends on ther area you talk about). What DOES matter is that they OWN the customer. That's where the value lies. Remember, it a lot more expensive to take away someone else's customer than it is to 'buy' them for the first time, or retain them (supposedly 5 times more expensive). In RCN's case, they are offering customers a new type of service they have never had before - bundled services - which basically mean simplified and total lower costs of household telecom services. So, acquiring customers, where there are no comparable alternatives, is easy. Assuming RCN does a decent job of managing their customers, it's going to be rather expensive for AT&T or BAtlantic to grad RCN's customers - it would be a lot cheaper to simply buy RCN out at a price somewhere between RCN's cost of customer acquisition and about 5-7 times that cost.
