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1 edit | reply to woodward
Re: New high speed tier and price increases. said by woodward:Far as XMission is concerned? Truth is, we're far past the days when connectivity was bread and butter. In fact, hosting broadband is our least profitable service. Believe me, all the DSLR bluster about ISP services ripping off consumers over monthly quotas is far, far off the mark. Most heavy data consumers are costing us a small fortune. I think if you look at the cost on an individual basis, this is the case. If you look at the whole picture, then, in my opinion, you need those heavy data consumers and residential connections. Lemme explain...
I'm just guessing with all this... by looking at your graph stats, your Qwest DSL customers use about 50% of your bandwidth. Add Utopia to that and your bandwidth usage by providing connectivity is probably pushing 70-80%. That's a lot of bandwidth usage that gives you leverage to negotiate lower prices with your backbone providers for a lower Mb/s cost. That lower Mb/s cost makes your collocation/hosting/other business more profitable. If you stopped providing connectivity right now, your backbone costs (per Mb) would probably go up quite a bit. The Qwest DSL and Utopia customers also help offset the cost of running your datacenter. Take DSL and Utopia out, you would find, in my opinion, that your data center wouldn't be as profitable. I would also give a little credit to residential and heavy bandwidth users in helping you (possibly forcing you) to build out a larger capacity network that makes Xmission competitive in the collocation market in Utah. Honestly, I wouldn't even look at Xmission for collocation if they didn't have GigE connections and larger routers. There are a number of large collocation companies in Utah that have big data centers, large pipes and facilities designed extremely well for 100% uptime. I just don't think Xmission would have built as good of a network without the connectivity customers. In many ways, you're following in the footsteps of ViaWest.
Right now we're getting our feet wet with VoIP, and hope to grow quickly into full PBX and unified communications hosting. I hope you can find success in these areas. So many companies are into this and a number have closed up shop (or are really struggling). If you can find ways to be different, then I think you can succeed in this area. You HAVE to be different.
We also started a CLEC subsidiary that we can use for interconnect/colocation and just lease last mile. Dunno if its worth the investment, though.
I don't know that becoming a CLEC is really worth it either. CLECs seem to be struggling too with either closing up shop, merging, or getting bought out. I think it's hard to make money in this area, but it may be the only option to reach some customers. There is, however, some really neat copper-based equipment out there that shows that copper still has a lot of potential.
I think it is an interesting time for Xmission. I'm really interested to see what Xmission does over the next 2-4 years. Things are changing. It seems that a critical junction point is forming. I just hope that Xmission isn't too late to enter some of the different markets out there. Xmission has to change and is probably large enough to do it. I think Qwest building a separate ADSL2 network shows the beginning of the end of 3rd party ISP's. | |
 woodwardXMission BroadbandVIP
join:2000-12-28
Salt Lake City, UT | Your thinking is dead on for the most part, and we have pages and pages of data breaking down this relationship. There is indeed symbiosis. But our bandwidth consumption has always been driven by the coloc, and not access subscribers, and that's for one critical reason -- coloc = upload. Access = download. We've always essentially used the glut in inbound data to fuel our access service. It is a very, very rare occasion that we have to increase bandwidth for access subscribers.
You're absolutely right about the per-Mb cost, though. But, believe it or not, it isn't until just within the last couple of months that we have crossed into significant discounts. We also have a bad habit of re-investing those savings into our customer's service (*GASP* what are we thinking?!?!?!).  At the end of the day, we're still only making pennies on every access subscriber.
quote:
I think Qwest building a separate ADSL2 network shows the beginning of the end of 3rd party ISP's.
There were about 160 third party ISPs on the Qwest conference call that announced this who were realizing the same thing. | | |
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| said by woodward:We've always essentially used the glut in inbound data to fuel our access service. It is a very, very rare occasion that we have to increase bandwidth for access subscribers. I didn't even think of that. It seems like the two really complement each other and can help the bottom line.
We also have a bad habit of re-investing those savings into our customer's service (*GASP* what are we thinking?!?!?!).
Have you had any word on video with these new speed tiers or with the ADSL2 deployment? I ran across something interesting today going through some Sandy City Council minutes. They're about 6 months old, but I haven't heard/seen anything about this until now -- at least here in Utah. Here are two links to the minutes:
»sandy.utah.gov/fileadmin/downloa···_min.pdf -- Public hearing 3
and
»sandy.utah.gov/fileadmin/downloa···_min.pdf -- Council item 4
It appears as though Qwest wants to obtain a video franchise agreement in Sandy City to offer video/cable services over (what I'm guessing) their ADSL2 network. | |
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