Posted 01/2001
Platform X
Execute or Be Executed
According to my Webster's dictionary, this word has two distinctly different meanings. One definition is "to carry out; accomplish." The other, more morbid definition is "to inflict capital punishment; put to death."
Unfortunately in the competitive telecom industry of late, these two definitions have increasingly found themselves intertwined. Service providers that set lofty goals with their business plans, but fail to accomplish them are finding themselves punished by the formerly overexuberant stock market and investors--forced to downsize significantly, and in some cases, put to death by bankruptcy or acquisition at fire sale prices.
Y2K has been a less-than-stellar year for competitive providers.
There have been the bankruptcy filings by industry granddaddies, GST Telecommunications Inc. (www.gstcorp.com) and ICG Communications Inc. (www.icgcomm.com). These companies were forced into Chapter 11 because of service delivery problems, huge amounts of debt and lack of the necessary funding to see their ultimate plans to fruition.
Prism Communication Services Inc. (www.transwire.com) had to virtually shutter its operations because it "lacked the financial means to remain a standalone business," according to a company statement.
Other companies had to scale back their expansion plans and employee head counts because their financial results were less than expected, and they were unable to support current staffing levels, much less geographic growth. Teligent Inc. (www.teligent.com), Network Access Solutions (www.naswireless.com) and New Edge Networks Inc. (www.newedgenetworks.com) were among the CLECs forced to trim their ranks and consolidate some regional offices.
Much has changed in the industry since the go-go early days when stocks soared just at the mention of deploying a circuit switch or planting some fiber in the ground. Providers now need to prove that they can attract customers (meaning: revenue), provide superior service, and meet or exceed the growth goals they have set.
In other words, competitive providers must be able to execute a sane, profitable business plan without setting unreasonable expectations for investors and end users. The inability to do so may ultimately lead to a grim, painful walk to the executioner's block.
Gail Lawyer
Editor in Chief
