| reply to Network Guy
Re: Northpoint Buyers and the Future I believe Northpoint as a company is currently valued at around (yes) $1 billion dollars. Their market valuation is $600 million dollars (assets) and they are carrying a debt burden estimated at just over $400 million dollars (liability). I may have transposed these numbers, but they are accurate according to most estimates.
AT & T has plenty of cash to buy Northpoint, since they just sold several billion dollars worth of residential cable assets in order to stay within the FCC 30% cap. They (as a company) are doing fairly well despite the poor showing of the company's common stock. Northpoint would provide a good product fit and would (IMO) round out the offerings of AT & T Broadband.
Rhythms is not (IMO) a player in this auction, since they are themselves barely hanging on for dear life in the DSL services marketplace.
Microsoft would be a very good bet to purchase Northpoint outright since they currently have no DSL Market penetration and currently have a positive market capitalization of $27 billion to use any way they see fit. Usually Microsoft enters a market by buying a major player in a market segment they want to become a major player in. Buying NP would achieve major player status in the DSL arena virtually overnight for Microsoft. Couple this with the fact that M$ already has a current strategic partnership with Northpoint (worth a $30 million dollar M$ investment) to offer DSL Services marketed by MSN and riding NP lines.
I personally don't mind if AT & T or Microsoft buys Northpoint, but Microsoft would probably run Northpoint better and charge less for services since they are more consumer oriented. AT & T would probably go more for business lines if they purchased Northpoint since they would not want to undermine their ATM and Frame Relay T-1 business services by offering cheap SDSL to consumers. Also anyone who has been an AT & T cable modem customer can probably tell you that the A T & T cable modem system is managed poorly, overloaded and in need of an overhaul, so you can probably imagine how A T & T would handle a national network of DSL equipped central offices, customer service and the like. On the other hand, A T & T has (or hopefully can find) the talent to bring it all together if they set their mind to it.
I believe Northpoint will continue on pretty much intact after the auction, with a new and clear perspective and the backing of a large, stable, cash heavy parent company as a cushion. They can then reopen the 500 plus central offices they closed due to belt tightening and continue to deploy DSL services at competitive prices, and (hopefully) help to crush the Baby Bells into submission, at least as far as DSL service is concerned. I dislike monopolies, and love competition and a renewed Northpoint keeps competition alive and also makes the availability and delivery of DSL at different service levels, speeds and prices a better bet in the future.
[text was edited by author 2001-03-07 04:50:50] |
