WorldCom Bids On Various Rhythms Assets

iamabot writes: "DSL providers are cheap these days. After the AT&T acquisition of NorthPoint assets for 135 million, WorldCom has issued a 40 million dollar bid for various assets of Rhythms. The interesting thing here is after some other providers disconnected their subscribers, WorldCom seem to be interested in operating the existing network. I suspect this will actually be a fairly cheap endeavor, when compared to the capital and recurring expenditures DSL providers faced over the past few years, especially for WorldCom. The majority of the cost associated with lighting up a DSL network nationally involves the capital expenditures to buy the equipment and the huge recurring monthly transport costs for central office aggregation to a node. Does anyone else see the acquisitions in the past year or so as an opportunity for the DSL industry to rebound?"

Costs

[pmc]

Cost, in a business, are two sorts - capital and operational. What Worldcom have done here is picked a business at a discount compared to the capital expediture they would be required to make to build the same business. A fire sale in other words.

I suspect this will actually be a fairly cheap endeavor, when compared to the capital and recurring expenditures DSL providers faced over the past few years

Now, the recurring cost will be a bit less for Worldcom compared with Rhythms but not by a huge margin (basically by the amount it takes to service the smaller debt, plus some from economies of scale). So I don't think that this will be a fairly cheap endevour to run. However, as the DSL market is undergoing a shakeout there will be less competition, and this will push user costs up.

The equation is a bit less opex, low capex for the infrastructure, and more revenue generated due to price increases (and, possibly, provision of low cost high margin services to a larger pool of users). Hopefully, opex+capex servicing+investment revenue, or it's goodbye DSL.

Re:Stopping the SPAM

[Anonymous Coward]

Ameritech called me when I already had their DSL installed. Our conversation went like this:

Ameritech: I'm calling to tell you about our high-speed DSL internet connection that...

Me: I already have Ameritech DSL. Why are you calling me?

Ameritech: Oh. I'm sorry. So, how do you like it?

Me: Well, I was really displeased with the 50 days it took you to get it installed.

Ameritech: Oh.

Me: And I didn't appreciate having to call your technicians back 4 times for them to get the connection working correctly.

Ameritech: Oh. Well..

Me: And I didn't appreciate that when each technician (or should I say subcontractor, since nobody at your company actually does any of the work) was told to fix the wrong thing. It even got completely disconnected once during the whole fiasco.

Ameritech: Oh, well I...

Me: But other than you wasting my time, being incompetent, and furthering a monopoly, it's been a real dream. It works pretty well.

Ameritech: Sir, I'm very sorry that...

...click... I hung up at that point.

Me: Jerk ass!

-D