North American Network Operators Group Date Prev | Date Next | Date Index | Thread Index | Author Index | Historical Re: sprint passes uu?
> note that $170/Mbit is actually below cost for any network smaller than > sprint's or uunet's, once you figure in the people, the routes, the > rent, and the depreciation, and then fuzz it based on economies of > scale. however, the market hasn't bottomed yet, and most people still > don't know what their costs are. once we bottom out and start > regenerating, $200/Mbit to $300/Mbit for wholesale high-commit transit > is going to be just about right, given the single-digit NPM that you get > from high capital long term commodity plays. This is total and udder rubbish, the same kind that took one of the best networks out there and destroyed it. CGS has a very strict definition. CGS of a company A that gets goods from B does not care about B having negative margins. There is a number of good providers that provide very limited service at a rate of under $100 Mbit/sec. An Enterprising Co takes transit from two of those companies paying $100 Mbit/sec to each. Adding a few services, one of which is called inhouse customer service that does not rely on former security guards paid $5.25 per hour and happily resell it at $300 per Mbit/sec. Factoring real salary costs, real equipment costs and real depreciation schedules, the Enterprising Co manages to make money hands over fist because it does not spend $80MM USD to built 15,000 sq. feet of space. Alex
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