Thursday, August 17, 2006

Why CLECs will crash and burn

We are seeing CLECs announcing that their losses are as bad as before. Wahoo! What they need to be doing is selling product. End of story. The only way companies stay solvent is to sell service. You need to have not just revenue but profit, cash flow, cold hard bankable cash. How do you do that? Focus on a niche market. Have services people want. In Tampa, we have Nuvox, USLEC, Paetec, Xspedius, USLEC, and XO running around selling the same crap. It is not possible to differentiate among their Internet T1, PRI, or Integrated T1, except on performance, installation interval and price. (Two of those the customer finds out about post-sale). And in a bandwidth hungry society these CLEC's don't have much to offer. (The exception being bonding T1's and Mid-band Ethernet). Cable modem and DSL appear faster (and cheaper) to the average consumer. It is a dilemma. And how do you solve that when you recycle people from the last merger-failed-same old CLEC???

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