Zayo woes

Wed Sep 20 08:04:17 UTC 2023

On 9/19/23 18:05, Mike Hammett wrote:

> Some of it is scale-related. Someone's operating just fine at the size 
> they are, but the next order of magnitude larger enjoys many benefits 
> from that size, but it takes either A) luck or B) the right skills to 
> be able to move up to get those benefits. In terms of network 
> operators, there's a big difference between a company of 1 and a 
> company of 2. Again a big difference between a company of 2 and a 
> company of 10. Another big difference between a company of 10 and a 
> company of..  I dunno, 100?
>
>
> 1G waves and 100G waves aren't *THAT* different in price anymore. 
> However, if 1 is doing you just fine, the much better cost per bit of 
> 100 won't do you a darn bit of good and will probably hurt. The hurt 
> is not only due to the higher MRC, but now the higher NRC for 
> equipment with 100G interfaces. If you can put enough bits on the line 
> to make it worth it, you've got yourself tremendous advantage. The 
> acquisition pays for itself in marginally higher costs for much higher 
> revenue.
>
> The company may have been doing just fine before, but couldn't afford 
> the move up to 10 or 100 because their present market couldn't justify 
> it and the larger market wasn't obtainable until they had it. Catch 22 
> that can't really be overcome by most. Enter M&A. Someone just can't 
> get to the next level they need to compete with those that can.

I'm talking about companies of relatively equal size and influence.

It's all benefit for smaller companies, even if it may be at the cost of 
the larger one.

Mark.
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