Lots of interesting but small stuff to comment on today, so let’s go through them:
Paetec’s integration milestone – Paetec announced today that they have completed integrating the McLeodUSA data network with their own, 7 months after closing the deal. That’s pretty quick when one compares to Level 3’s odyssey, but one has to realize that Paetec has fewer layers to integrate than a Level 3 because they are basically fiber-free and the territories covered by the pieces do not overlap substantially. There are fewer pieces and they are less tangled. Some, including myself, have wondered if Paetec’s revenue warning related at all to difficulties integrating the networks, but I haven’t actually seen any evidence to support that claim since then. This implies that their growth issues probably come down to the economy and the stickiness of their customer base.
Abovenet’s offer – Abovenet extended their offer of waiving the construction costs for new buildings brought on-net, except for the New York area. They have been doing this for a few months now, and it does seem to imply a newfound aggressiveness. First, they are trying to achieve scale outside their flagship NYC region. Second, it implies that they have the cashflow to support increased capital expenditures – otherwise they would focus on less capital intensive promotions. Of course, we wouldn’t need indirect ways of estimating their cashflow trends if they’d just start reporting earnings again. On the other hand, I still think they are waiting for a buyout, it’s just easier than fixing everything with the SEC.
XO and Cisco Telepresence – XO announced today it has achieved Cisco certification for Telepresence. What does that mean? In essence, they have proved that they can deliver a product that currently is more a proof of concept than a commercial product – so from a revenue perspective, it’s a big non-event just as any PR regarding achieving certification for some technology usually is. But that’s never stopped anyone else from issuing a PR so I shouldn’t be too hard on XO for doing the same. They’re continuing to make the point that their network is increasingly competitive wth the field, can’t blame them for that.
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