KPNQwest Files for Bankruptcy 189
ives writes "Today KPNQwest filed for bankruptcy. KPNQwest owns the most important fibre backbone in Europe. Apparently they are not planning on switching off their network, but without maintenance it will probably slowly degrade. The official press release can be found here."
I'm not sure that's such a great plan (Score:3, Interesting)
US Buyout? (Score:4, Interesting)
Shit (Score:4, Interesting)
No maintenance? (Score:4, Interesting)
Hacker paradise!
Who is next. (Score:2, Interesting)
The Register story (Score:2, Interesting)
When did it _have_ maintenance? (Score:2, Interesting)
letting it explode (Score:4, Interesting)
So the plan might be to just let it explode, buy the remaining assets, and start a new company.
That's a likely scenario here in Holland.
It is what happened to DAF (trucks) and other companies.
They go broke, and in the same time they start a new company with the bought assets of the old one.
Your debts are cleared, and the tax accountants aren't wanting money from you anymore.
Still I expect it would cost money to buy the assets, so if they really do not want to invest anything in that network anymore, it makes my story just a wild guess.
Network going out at 16:30 UTC. (Score:3, Interesting)
In article, they also mention that the KPN's British offices will be/was shut down around midday. I'm not sure on whether this means today (Friday) or tomorrow (Saturday). Probably today, which meant that the network went down like four hours ago..
good riddance (Score:2, Interesting)
too bad for the employees, tho.
How Does This Relate To Recent Slashdot Articles? (Score:3, Interesting)
Global Crossing [thedigest.com], PSINet [convergedigest.com], and STAR [thedigest.com] all bankrupt while WorldCom [usatoday.com], in trouble and Qwest taking a several hundred million dollar loss [usatoday.com] it looks like the number of telecommunications companies is shrinking fast and it is unclear what will happen to their networks.
Not to be a contrarian, but this just goes to show that things aren't really black and white when it comes to the cost of broadband and in fact we may be getting it cheaply considering how much was spent building the networks.
Re:Cost of Bandwidth? (Score:3, Interesting)
Since you mention capping and volume limits, I'll assume you're talking about the last-mile provider. The cable and cable-modem business is the one I know the most about, so I'll do some back-of-the-envelope calculations for that. Assume for the moment that the data business has to bear all of the costs.
The first major component of the monthly bill is the cost to construct the network. Hybrid-fiber-coax, the architecture required to operate two-way services, costs about $40,000 per mile for materials and installation. A mile of plant passes surprisingly few houses on average-- call it 100 for ease of calculation. Assume 20% of houses passed subscribe to the data service, and the construction cost per subscriber is $2,000. If the company wants to get its construction costs back in five years (we'll ignore issues of interest and risk for the moment), the monthly revenue needed is $33.33. There's some head-end equipment (a cable-modem termination system costs about $30,000) but those are spread over a lot more subscribers. Call it $35/month to pay for the network itself.
Now consider other recurring monthly expenses. There's the billing system that generates monthly bills for millions of subscribers. There's the customer-care systems. There's the salaries for the people who maintain the equipment and answer the phones. There's the rent/electric/sewer/etc for the space where those people work. There are indirect costs associated with those employees-- if you have 5,000 employees who operate the network and take care of the customers, you need a personnel office, a finance office, etc. This type of cost can easily run to $20/month per subscriber.
You need connections to the larger Internet. An OC-12 (600 Mbps) connected to somebody's backbone costs about $120,000/month, and you need one of those for approximately every 60,000 subscribers. That's another $2/month per subscriber. There are a bunch of "little" costs like that, let's guess that they add up to $5/month per subscriber.
When you set out to do this on a large scale and in a short period of time, you have to borrow an enormous amount of money. The people who loan it to you want interest. Comcast is buying AT&T Broadband, with 16M subscribers (counting video and telephony subs as well as cable-modem subs) and assuming $20B in debt. With an average interest rate of 7.5%, the monthly interest payment works out to around $7.80/month per subscriber. Add all that up and you have a total of about $67.80/month.
To be honest, not all of the network construction costs should be charged to the data service, and the billing system and personnel are spread across other services as well. Even so, an allocated cost of $40/month for data service is not a bad estimate, and that doesn't include anything for profit.
Re:Network going out at 16:30 UTC. (Score:2, Interesting)
We're not going dark, we're pretty much guaranteeing the core will stay lit till monday morning when the administrator will start in Brussels, even then we're not saying it will go dark. What will happen on monday depends on the administrator.