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Broadband Competitive Analysis

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Competition in St.Louis small business market and the opportunities for Sprint ION

Competition in St.Louis small business market and the opportunities for Sprint ION

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  • 1. Broadband Competitive Intelligence Report Broadband Competitive Analysis Small Business Market St. Louis, Missouri October 2000 Salestar, Inc. 300 Lakeside Drive, 11th Floor Oakland, CA 94612 Telephone: 510.637.4700 Facsimile: 510.740.1040 www.salestar.com Information subject to change without notice. This publication may not be reproduced, sold or used in any form or by any means - graphics, or electronic, including photocopying, scanning, or information storage and retrieval systems - without written permission of Salestar, Inc.© Copyright 2000 Salestar Inc. All rights reserved 1
  • 2. Broadband Competitive Intelligence Report Small Business Market - St. Louis, MO Table of Contents • Introduction .................................................................................................... pg. 3-4 • Demographic Profile ........................................................................................ pg. 5-6 • Strategic Notes ............................................................................................... pg. 7-8 • Competitive Matrix DSL Providers SWB .................................................................................... pg. 9 Birch .................................................................................... pg. 9 Gabriel ................................................................................. pg. 10 Primay Networks ................................................................ pg. 10 Integrated Service Providers Sprint ................................................................................... pg. 11 Allegiance ............................................................................. pg. 11 XO ...................................................................................... pg. 11 Intermedia ........................................................................... pg. 12 Qwest .................................................................................. pg. 12 Fixed Wireless Winstar ................................................................................. pg. 13 Teligent ................................................................................. pg. 13 • Benchmark Matrix .......................................................................................... pg. 14-16 • About Salestar ................................................................................................ pg. 17© Copyright 2000 Salestar Inc. All rights reserved 2
  • 3. Broadband Competitive Intelligence Report Introduction St. Louis is making a late transition from a manufacturing hub into an entrepreneurial service based economy. Venture capital investments rose from a paltry $14 million in the first quarter of 1999 to $311 million in the second quarter of 2000, exceeding $242-$283.5 million for the entire 1999. These investments are still less than half of the $792.9 million venture capital investments San Jose, the largest for any city, obtained in a single first quarter of 1999. The city has the wherewithal, including infrastructure and human talent, to fuel a technology boom. It had 6,000 fiber optic miles at the end of 1998 spread over the entire commercial sector. The region is also rated first for backbone traffic and second for domain density in the USA. High-tech labor force constitutes 15% of the labor force. This talent accrues very largely due to the presence of the 3,992 branches or subsidiaries of Fortune 1000 companies located in the region, including headquarters of eleven Fortune 500 companies. When these companies reduced their labor force in the 1990s, some of the employees turned into entrepreneurs. Low costs of doing business, modest cost of living and superior quality of life are added attraction for doing business and to draw talent to the region. Office rent at $19.07 per square foot is comparable to other boomtowns like Omaha ($19.00), Nashville ($18.50) but much lower than Las Vegas ($29.16). The roadway congestion index at 1.05 is comparable to other growth pole like Salt Lake City (1.05), Omaha (1.00) but lower than Las Vegas (1.20) or San Francisco (1.33). Prospects for small business growth are optimistic. The latest small business confidence index for St. Louis rated as 12th in the country. The estimated future economic growth for the period 1998-2003 (forecast by Arthur Andersen) at 22.15% compare well with other technology centers such as Kansas City (23.27%), San Antonio (24.92%) and Raleigh (23.52%) but short of the top performers such as Nashville (31.56%) and Salt Lake City (29.97%). Missouri has a favorable climate for business because it requires the approval of 2/3rds of the voters in order to increase taxes of more than $50 million. It does not impose any Internet tax or any electricity tax. However, the state has a relatively high capital gains tax of 6%, which is rated 29th in the country.© Copyright 2000 Salestar Inc. All rights reserved 3
  • 4. Broadband Competitive Intelligence Report continued... The availability of a technical experienced manpower pool is propelling technology driven growth in the metropolitan area. St. Louis has been the headquarters of Southwestern Bell, which has been the incubator for talents that created companies such as Brooks Fiber Properties (later sold to MCI WorldCom), one of the first CLECs in the country. The former employees of Brooks have subsequently initiated start-ups like Gabriel Communications, CoreExpress, Integra, etc. Other companies like McDonnell-Douglas, Boeing, etc have also contributed to the talent pool. Small businesses are looking for advanced telecommunications services, which is evident from the increasing numbers of companies planning to offer Voice over DSL or integrated services using various types of access technolo- gies. Gabriel Communications, Primary Networks (now part of Mpower Communications) and Omniplex Communica- tions are committed to offer integrated services over DSL within the next two quarters. Currently, integrated services are provided by using T-1 as access technology; AT&T plans to offer its INC services (also in collaboration with AccessUS as its reseller) and a similar package is available from SAVVIS (sans voice). NextLink (now XO Communica- tions) and Qwest are major providers of T-1 (with static bandwidth allocation). New entrants to the St. Louis’s market provide a foretaste of the intense competition that can be expected in the near future. Some of the new companies include strong regional players such as WorkNet, a fixed wireless provider that has targeted the price sensitive segment of the small business market that can make do with a small web server to accommodate no more than 6 IP addresses. Similarly, Birch Telecom offers low priced single data line DSL to small businesses. Companies like SAVVIS, which offers policy managed integrated data services, meet customers with more sophisticated needs. Allegiance Telecom, which has grown from a smart build-up strategy to a facilities based pro- vider, is expanding its data services from its previous focus on voice services.© Copyright 2000 Salestar Inc. All rights reserved 4
  • 5. Broadband Competitive Intelligence Report Demographic Profile Business Growth · Job growth has been a slow 1.9% per year, ranked 76th nationally · Expected per capita income growth for ‘98-‘03 is 22.15% Profile of Businesses · 3,992 branches subsidiaries of Fortune 1000 companies (ranked 4th) (11 headquarters of Fortune 500) · Had 68,751 firms with payrolls (1999) · Services accounted for the largest share (37.3%) of all businesses, manufacturing (5.4%) · A low index of business diversity (5.7) compared to Las Vegas (62.5) indicates susceptibility to recession T v“ r à 9v† ‡ … vi ˆ ‡ v ‚   s ÃAv… € † 16000 † r 14000 † † r 12000  v 10000 † ˆ 7 8000 à s ‚ 6000 à … r 4000 i € 2000 ˆ I 0 1 -4 5 -9 1 0 -1 9 2 0 -4 9 5 0 -9 9 1 0 0 - 2 4 9 2 5 0 - 4 9 9 5 0 0 - 9 9 9 1 0 0 0 or mor e T v “ r Ã8 yh † † à i ’ ÃIˆ € i r … à ‚ s Ã@€ ƒ y ‚ ’ r r † Climate for Small Business · Missouri is rated 14th nationally in small business confidence index (September 2000) · Positives: zero electric utilities tax, tax limitation state · Negatives: high sales tax (33rd), high crime (31st) · Cost of Community services in St. Louis (taxes, fees and license costs) is ranked 66th nationally Venture Capital and Business Start-Ups · Venture capitalists invested $14 million in St. Louis (1Q 1999) compared to $792.9 million for San Jose · Business Start-ups Index at 48 is less than half of Las Vegas at 100 · Growing Business Index at 43 is also low compared to 100 for Salt Lake City · Cost of doing business (office rent) at $19.07 per square foot is low compared to $48.00 for San Francisco© Copyright 2000 Salestar Inc. All rights reserved 5
  • 6. Broadband Competitive Intelligence Report continued... Internet · Ranked 35th in the USA as the most wired city · Ranked first for backbone traffic, 2nd for domain density · At 40.8% in 1999, Internet penetration in St. Louis was below the national average of 43.7% Labor Force · High tech labor force at 205,476 constitutes 15% of the total labor force · Professionals and Managers constitute 13.8% of labor force, less than the 14.4% national average · Unemployment rate was 3.4% in August 2000, down from the 4% of the previous year · 20.9% of adults over the age of 25 have a Bachelor’s degree (Greater Washington is highest at 37%)© Copyright 2000 Salestar Inc. All rights reserved 6
  • 7. Broadband Competitive Intelligence Report Strategic Notes · Southwestern Bell does not offer integrated broadband services either by DSL or T1 access technologies. Some of its T1 products leave open the option for customers to do their own bonding for integrated access but this they can do at their own cost. The incumbent’s focus is on single line DSL access and its emphasis is on drawing customers by low prices. These low prices are available for the widest range of speed options from 384 Kbps to 6 Mbps downstream. Southwestern Bell’s product range does not include SDSL. · Primary Networks is a facilities-based CLEC and DSL provider based in St. Louis. The company is a very strong competitor in the St. Louis DSL market and has approximately 35% of all DSL connections in the state of Missouri. Currently, Primary Networks has its equipment in 27 central offices in the St. Louis metropolitan area to provide both ADSL and SDSL services. Primary Networks completed its merger with MPower Communications, a VoDSL provider, in June 2000, and will begin offering VoDSL service in St. Louis in 1Q01. · Several competitors, for example Qwest, have taken recourse to product differentiation strategy to deal with the preda- tory pricing of the incumbent. This includes a host of web hosting and e-commerce options and application services. By offering web hosting and application hosting services, these carriers strengthened its position with their existing customer base. · Qwest, which combines generous discounts to customers based on volumes of traffic and contract period. Qwest gives a discount of 21% on expenditures in the range of $500-$4,999 for a single year and up to 31% for a three year contract. Clearly, the intent is to build long-term relationships sustained by service. · XO Communications provides the widest range of web-hosting packages among all companies. This is despite the fact that its pricing is comparable to the less feature rich, “no frills”, products from a price oriented player like Allegiance. · Teligent is relying on its Premier package, which includes 50 MB of web hosting capacity and 50 e-mail user IDs. Although Teligent offers a Basic package, its pricing is only marginally lower for its “On-net” (lit buildings) products. Priced at about twice the level of Winstar, another fixed wireless provider, Teligent is counting on its added features to compete in the market. · Birch Telecom provides the widest range of web hosting and e-mail options among DSL providers. Its web-hosting storage capacity, however, is an additional cost over its already high priced access solutions. Customers can obtain between one and one hundred e-mail accounts depending on the bandwidth selected. Similarly, Birch offers a choice of three web- hosting packages, with storage ranging from 10 MB to 75 MB. Although its access pricing is high, Birch offers local, long distance and high-speed Internet at 12% to 42% less than Southwestern Bell, all under one single bill.© Copyright 2000 Salestar Inc. All rights reserved 7
  • 8. Broadband Competitive Intelligence Report continued... · WorkNet, a fixed wireless carrier, which is focused on low cost bandwidth needs of small businesses that require less than 6 IP addresses and need to port a small web server (it has wired 108 buildings in the city and has covered 60-65% of the city). · The price sensitivity of the market is demonstrated by current promotions that are available from several companies. Gabriel Communications waives the entire installation and CPE charges when bundled with 3 voice lines and three-year contract. Winstar is offering 7 months free service with a three-year contract. Similar, discounts are available from XO Communications, Teligent and Allegiance.© Copyright 2000 Salestar Inc. All rights reserved 8
  • 9. Broadband Competitive Intelligence Report 6RXWKZHVWHUQ %HOO 6RXWKZHVWHUQ %HOO DSL Providers (QKDQFHG 6/ %XVLQHVV 6/ %LUFK 6/ 3URGXFW 7…‚hqihqÃUrpu‚y‚t’ ADS L ADS L S DS L 384Kbps - 1.5 Mbps /128Kbps 384Kbps - 1.5Mbps /128 Kbps 160Kbps , 200Kbps , 416Kbps , TƒrrqÃ9‚ †‡…rh€ ƒ†‡…rh€ V 1.5Mbps - 6.0 Mbps /384Kbps 1.5Mbps - 6.0Mbps /384Kbps 784Kbps , 1040Kbps , 1544Kbps 1, 15, 25, 50, 75, 100 (res pectively with @HhvyÃ6pp‚ˆ‡† 5 E-mail boxes , 3 E-mail Alias es E-mail s pooling each offered s peed) D Ã6qq…r††r† Q 5 S tatic 32 S tatic (29 us able) 1 (s tatic) Tuh…rqÃXriÃC‚†‡vtÃDpyˆqrq No No No Included w Web hos ting packages ith 9h‡hÃT‡‚…htr 10MB (e-mail)/3MB (P ers onal page) 10MB (e-mail)/3MB (P ers onal page) (10, 30 and 75MB ) Yes (Up to 3 Domain Names at initial time 9‚€hvÃIh€rÃSrtv†‡…h‡v‚ $100 per Domain Name Yes of ins tall) Yes (Up to 3 Domain Names at initial time Q…v€h…’Ã9 T I $100 per Domain Name Yes of ins tall) Trp‚qh…’Ã9 T I Yes Yes Yes G‚phyÃW‚vprÃTr…‰vprÃDpyˆqrq No (available at an additional cos t) No (available at an additional cos t) No (available at an additional cos t) G‚tÃ9v†‡hprÃTr…‰vprÃDpyˆqrq No No No (available at an additional cos t) W‚vpr9h‡hÃ9v†p‚ˆ‡ No No Yes (average 30%) 7hpxÃVƒSr€‚‡rÃ9vhyÃ6pp‚ˆ‡ Yes Yes Yes PyvrÃ6pp‚ˆ‡ÃHhhtr€r‡ No No No 8‚‡r‡ New S erver Acces s s New S erver Acces s s New S erver Acces s s 3ULFH 160Kbps - $145, 200Kbps - $175, LowS peed: $59.95 (Normally $79.95) LowS peed: $238 H‚‡uy’ÃSrpˆ……vtÃ8uh…tr 416Kbps - $260, 784Kbps - $375, High S peed: $179.95 High S peed: $328 1040Kbps - $460, 1544Kbps - $610 $0 (if s elf-ins talled) $0 (if s elf ins talled) $500 (month-to-month) D†‡hyyh‡v‚Ã8uh…tr $150 (S B C technician ins tall) $150 (S B C technician ins tall) $250 (1 year term) / F ree (2 year term) @„ˆvƒ€r‡Ã8uh…tr $99 (includes Modem, NIC and s plitter) $99 (includes Modem, NIC and s plitter) Included DTQ uh…tr Ã8 No charge No Charge No Charge Voice lines 1 to 5 $29 to $32 $100 for regis tration of each additional Voice lines 6 or more $27 to $30 Domain Name after initial ins tall. $100 for 6qqv‡v‚hyÃQ…vpvtÃ@yr€r‡† None Web hos ting packages - S pace Genie P rimary DNS of each additional Domain $30/month, S pace Cadet $25/month, Name after initial ins tall S pace Hog $75/month 8‚‡…hp‡ 1 Year 1 Year Month-to-month, 1 or 2 Years @h…y’ÃUr…€vh‡v‚ÃArr $200 $200 $250 Q…‚€‚‡v‚† R educed MR C from $79.95 to $59.95 None None 6HUYLFH @„ˆvƒ€r‡ÃD†‡hyyr… S B C and S elf-ins tall S B C and S elf-ins tall Northpoint P…qr…ÃD‡r…‰hy 15 B us ines s Days 15 B us ines s Days 45-60 Calendar Days UrpuvphyÃTˆƒƒ‚…‡ 24x7 24x7 24x7 D‡rt…h‡rqÃ7vyyvt Yes Yes Yes 6DOHV KDQQHO Uryrƒu‚r Yes Yes Yes Pyvr No No No P@ à H No No No Sr‡hvy No No No© Copyright 2000 Salestar Inc. All rights reserved 9
  • 10. Broadband Competitive Intelligence Report *DEULHO RPPXQLFDWLRQV 3ULPDU 1HWZRUNV DSL Providers 6/ %XVLQHVV 6/ 3ULPDU 1HWZRUNV 6/ 3URGXFW 7…‚hqihqÃUrpu‚y‚t’ S DSL S DS L ADS L P lan 12 - Upto 384Kbps /1 544Mbps 140Kbps , 200Kbps , 416Kbps , B as ic Line - 256Kbps (Min)/512Kbps (Max) (up/dow tream) ns Tƒrrq 784Kbps , 1040Kbps , 1200Kbps Expres s Line - 784Kbps (Min)/200Mbps (Max) P lan 3 4 - Upto 384Kbps /6 Mbps (up/dow tream) ns @ hvyÃ6pp‚ˆ‡† H 5 5 10 P lan 1 2 ( 1dynamic) D Ã6qq…r††r† Q 5 (dynamic) 1(s tatic) P lans 3 4 (1s tatic) Tuh…rqÃXriÃC‚†‡vtÃDpyˆqrq No No No 9h‡hÃT‡‚…htr 5 MB 5MB 5MB 9‚€hvÃIh€rÃSrtv†‡…h‡v‚ No (pas s through charge) $99 to regis ter anewdomain name $99 to regis ter anewdomain name Q…v€h…’Ã9 T I No Yes Yes Trp‚qh…’Ã9 T I No Yes Yes G‚phyÃW‚vprÃTr…‰vprÃDpyˆqrq No (available at an additional cos t) No (available at an additional cos t) No (available at an additional cos t) G‚tÃ9v†‡hprÃTr…‰vprÃDpyˆqrq No (available at an additional cos t) No (available at an additional cos t) No (available at an additional cos t) W‚vpr9h‡hÃ9v†p‚ˆ‡ No Yes (1 off from S WB ) 0% Yes (1 off from S WB ) 0% 7hpxÃVƒSr€‚‡rÃ9vhyÃ6pp‚ˆ‡ No Yes Yes PyvrÃ6pp‚ˆ‡ÃHhhtr€r‡ Yes No No 8‚‡r‡ No New Acces s S erver s New Acces s S erver s 3ULFH 140Kbps - $1 200Kbps - $1 25, 75 B as ic Line - $195.00 P lan 1- $349.95 P lan 2 - $299.95 H‚‡uy’ÃSrpˆ……vtÃ8uh…tr 41 6Kbps - $240, 784Kbps - $315, Expres s Line - $295.00 P lan 3 - $699.95 P lan 4 - $599.95 1040Kbps - $375, 1 200Kbps - $399 $200 but waivedif bundled D†‡hyyh‡v‚Ã8uh…tr $495.00 $400 for all plans w 3+voice lines ith @„ˆvƒ€r‡Ã8uh…tr $500 Included $745 for all plans DTQ uh…tr Ã8 No Charge No Charge No Charge $27.00 per bus ines s line and$35 per key 6qqv‡v‚hyÃQ…vpvtÃ@yr€r‡† No No s ys tem line 8‚‡…hp‡ 1 2, or 3 Years , 1Year 1Year (P lan 1 3) 3 Year (P lan 2 4) 60 day cus tomer s atis faction policy. After that, 60 day cus tomer s atis faction policy. Cus tomer is liable for the remaining @h…y’ÃUr…€vh‡v‚ÃArr cus tomer is liable for the remaining months in the After that, cus tomer is liable for the months in the contract contract remaining months in the contract 3 year term CP E is free or 2 year term Q…‚€‚‡v‚† None at this time None at this time CP E is $250 6HUYLFH @„ˆvƒ€r‡ÃD†‡hyyr… Gabriel Communications P rimary Networks P rimary Networks P…qr…ÃD‡r…‰hy 45-60 Calendar Days 20 B us ines s Days 20 B us ines s Days UrpuvphyÃTˆƒƒ‚…‡ 24x7 24x7 24x7 D‡rt…h‡rqÃ7vyyvt Yes Yes Yes 6DOHV KDQQHO Uryrƒu‚r Yes Yes Yes Pyvr No Yes Yes P H @ à No No No Sr‡hvy No No No© Copyright 2000 Salestar Inc. All rights reserved 10
  • 11. Broadband Competitive Intelligence Report Integrated Service T ƒ…v ‡ÃDPIà 6y y r t v h pr à D ‡r t…h ‡r q à 6ppr ††Ã à à à à à à à à à à à à à à à à Y P Ir ‘ ‡y v xà D ‡r t …h ‡r q à Providers A ˆy yà T r …‰v pr 6ppr †† Q… ‚ q ˆ p‡ ÃUrp u‚y‚t’ A D S L , Integrated Acces s , A T M platform T -1 T -1 64K bps , 128K bps 128K bps , 256K bps 1 bps /8M bps M Tƒrrqà Vƒ† ‡…rh€9‚ † ‡…rh€ 256K bps , 512K bps 384K bps , 512K bps 684K bps /1M bps 768K bps 768K bps D epends on Web H os ting pack age. @HhvyÃ6 p p ‚ˆ‡† 5 5 R ange from 1 to 100 accounts DQÃ6 qq… r† † r† M ultiple s tatic IP ’s M ultiple (s tatic) addres s es 16 s tatic (1 us able) 3 N o (available at an additional cos t and Tuh…rqÃXriÃC‚† ‡vtÃDp yˆqrq P ers onal Web page (6M B ) No different pack ages ) 9‚€hvÃIh€rÃSrtv† ‡…h‡v‚ Y es Y es (with Web H os ting pack age) Q…v€h…’ Ã9IT Y es Y es (with Web H os ting pack age) Trp ‚qh… ’ Ã9IT Y es Y es (with Web H os ting pack age) 1 to 300M B (variable with Web H os ting 0 9h‡hÃT‡‚… htr 6M B 25 M B pack age) 2-4 lines Unlimited local calling Call Waiting, caller ID, Call F orward, Voice G‚p hyÃW ‚vp rÃTr… ‰ vp rÃDp yˆqrq Y es (at an additional price) Y es mail, R otary H unt, Outgoing call res trict M ultiple phone numbers available 2 L ine plan either 1,000 minutes or 4,200 minutes per month 4 L ine plan either 4,200 minutes or 1 6,800 G‚tÃ9v† ‡hp rÃTr… ‰ vp rÃDp yˆqrq Y es (available at an additional price) Y es (available at an additional price) minutes per month 12 cents per minute beyond block ofPro vide minutes included in plan rs W ‚vp r9h‡hÃ9v† p ‚ˆ‡ Included No 10% dis count with Integrated A cces s on local and L D s ervices PyvrÃ6 p p ‚ˆ‡ÃHhhtr€r‡ Y es No Y es 8‚‡r‡ News group A cces s No No Q… vpr D A T A : 64K -$ 65; 128K -$ 130; 256K -$ 260; 2 L ine 4 L ine 128K bps -$ 270 51 -$ 520; 768K -$ 780 2K N ational-N on T erm: $ 292 $ 688 256K bps - $ 470 H‚‡uy’ ÃSrp ˆ……vtÃ8uh…tr V O IC E : 1 Channels $ 373-$ 530; 16 2 N ational-1 to 3 Y r: $ 266 $ 625 384K bps - $ 565 Channels $ 435-$ 618; 20 Channels $ 505- M etro-N on T erm: $ 232 $ 436 512K bps - $ 660 $ 71 24 Channels $ 559-$ 795 8; M etro-1 to 3 Y r: $ 211 $ 396 768K bps - $ 808 L O N G D IS T A N C E : $ 0.069 T erm plan: $ 149 D† ‡hyyh‡v‚Ã8uh…tr No $ 999 N on-term plan: $ 299 @„ˆvƒ€r‡Ã8uh… tr S print ION H ub included in M R C Included (Vina B ox) Included DTQÃ8uh…tr N o Charge N o Charge N o Charge T o run N A T , the additional configuration, s oftware, and R AM are charged at an additional $ 500 6 qqv‡v‚hyÃQ… vp vtÃ@yr€r‡† No Web H os ting $ 40.00/month (50M B ) Voice L ines $ 21.75 to $ 32.00 A dditional M ailbox $ 2.00/month Web H os ting P ack ages from $ 19.95 to $ 375.95/month 8‚‡…hp ‡ 1, 2 or 3 Y ears 1, 2 or 3 Y ears 1 Y ear R eturn full amount ($ 2000, $ 2500, $ 3000) of credit offered by Allegiance for M inimum of $ 800 or remaining balance @h…y’ ÃUr… €vh‡v‚ÃArr purchas e of D igital T runk Interface Card for contract with 1 2 and 3 yr. contract res pectively , F or the purchas e of a T -1 card and a 2-yr $ 50 off ins tall charge for 1 year term agreement X O will credit $ 2500 for labor Q…‚€‚‡v‚† No F R E E ins tall for 3 year term and the card. A ls o 4000 minutes of L D s ervices . Tr … ‰ vpr @„ˆvƒ€r‡ÃD† ‡hyyr… S print A llegiance X O/N extlink P… qr…ÃD‡r… ‰ hy 45 Calendar D ays 60 Calendar D ays 30-40 B us ines s D ays Urp uvp hyÃTˆƒƒ‚…‡ 24x7 (T elephone, E mail) 24x7 24x7 S atis faction guarantee, if not s atis fied Y es (99% up-time and 85 millis econds Tr…‰ vp rÃGr‰ ryÃ6 t…rr€r‡† with 90 days S print will pay up to $ 600 to N ot available latency) s witch back to previous provider D‡rt…h‡rqÃ7vyyvt Y es Y es Y es Thyr † Ã8 u h  r y Uryrƒu‚r Y es Y es Y es Pyvr Y es No No P@Hà No No No Sr‡hvy No No No © Copyright 2000 Salestar Inc. All rights reserved 11
  • 12. Broadband Competitive Intelligence Report Integrated T ƒ…v‡ÃDPIà D‡r …€ r qvh ÃTvtyr ÃU R r †‡Ã9r qvph ‡r qÃD‡r …r ‡Ã Service Providers 6ppr †† Q… ‚q ˆ p‡ ÃUrp u‚y‚t’ ADS L , Integrated Acces s , AT M platform T -1 T -1 64K bps , 128K bps , 256K bps 1 bps /8M bps M 56K bps , 128K bps , 192K bps , 256K bps , Tƒrrqà Vƒ† ‡…rh€9‚ † ‡…rh€ 384K bps , 51 bps , 640K bps 2K 684K bps /1M bps 384K bps , 51 bps , 786K bps , 1 2K 544K bps 768K bps , 896K bps , 1024K bps 11to 41(variable with Web hos ting @HhvyÃ6 p p ‚ˆ‡† 5 None provided package) DQÃ6 qq… r† †r† M ultiple s tatic IP ’s M ultiple with Web hos ting package 32 (s tatic) No (8 different packages available at an Tuh…rqÃXriÃC‚† ‡vtÃDp yˆqrq P ers onal Web page (6M B ) No (available at an additional cos t) additional cos t) 9‚€hvÃIh€rÃSrtv† ‡…h‡v‚ Y es (with Web hos ting package) Y es at an additional cos t ($ 50) Q…v€h…’ Ã9IT Y es (with Web hos ting package) Y es (included with regis tration) Trp‚qh… ’ Ã9IT Y es (with Web hos itng package) Y es (included with regis tration) 50 to 140M B (variable with Web hos ting None included. P rovided with web 9h‡hÃT‡‚… htr 6M B package) s ervices 2-4 lines Unlimited local calling Call Waiting, caller ID, Call F orward, Voice G‚p hyÃW ‚vp rÃTr… ‰ vp rÃDp yˆqrq Y es No mail, R otary H unt, Outgoing call res trict M ultiple phone numbers available 2 L ine plan either 1,000 minutes or 4,200 minutes per month 4 L ine plan either 4,200 minutes or 1 6,800 G‚tÃ9v† ‡hp rÃTr… ‰ vp rÃDp yˆqrq Y es (at an additional price) Y es (available at an additional price) minutes per month 12 cents per minute beyond block of minutes included in plan W ‚vp r9h‡hÃ9v† p ‚ˆ‡ Included No Y es (volume/term dis counts ) PyvrÃ6 p p ‚ˆ‡ÃHhhtr€r‡ Y es Y es Y es 8‚‡r‡ News group Acces s NNT P News F eed No Q… vpr D A T A - 64K :$ 1 1 23, 28K :$ 200, 256K :$ 270, 2 L ine 4 L ine 384K :$ 328, 512K :$ 640, 640K :$ 655, 56K bps - $ 209, 128K bps - $ 419 National-Non T erm: $ 292 $ 688 H‚‡uy’ ÃSrp ˆ……vtÃ8uh…tr 768K :$ 670, 896K:$ 710, 1024K :$ 780 192K bps - $ 495, 256K bps - $ 595 National-1to 3 Y r: $ 266 $ 625 VOIC E - $ 38.1 per Channel 3 384K bps - $ 750, 512K bps - $ 900 M etro-Non T erm: $ 232 $ 436 L ON G D IS T A N C E - B as ed on us age 786K bps - $ 1249, 1544K bps - $ 1395 M etro-1 to 3 Y r: $ 211 $ 396 terms . R anges from $ 0.046-$ 0.060 T erm plan: $ 149 $1000 for all s peeds (waived with a 1 2 or 3 , D† ‡hyyh‡v‚Ã8uh…tr 1Y r $ 500, 2 Y rs $ 250, 3 Y rs $ 0 Non-term plan: $ 299 year term) $ 2300 (aprox.) with a on-s ite ins tallation @„ˆvƒ€r‡Ã8uh… tr S print ION H ub included in M R C Included charge of $ 400 or a plug play router for $ 200. DTQÃ8uh…tr No Charge No No Charge $ 38.13/channel (1year term) 6 qqv‡v‚hyÃQ… vp vtÃ@yr€r‡† No B us ines s line (dial tone)$ 24/month Actual L ong Dis tance charges per minute B us ines s line + s tandard features $ 51.00 8‚‡…hp ‡ 1, 2 or 3 Y ears 1, 2 or 3 Y ears 1, 2 or 3 Y ears 90 day cus tomer s atis faction policy. After @h…y’ ÃUr… €vh‡v‚ÃArr that, cus tomer is liable for the remaining R epay $ 1000 dis count months in the contract $ 50 off ins tall charge for 1 year term Q…‚€‚‡v‚† Not available Ins tallation waived with a 1 2 or 3 year term , F R E E ins tall for 3 year term Tr … ‰vpr @„ˆvƒ€r‡ÃD† ‡hyyr… S print Intermedia Qwes t P… qr…ÃD‡r… ‰ hy 45 Calendar Days 60-75 Calendar Days 30-45 Calendar Days Urp uvp hyÃTˆƒƒ‚…‡ 24x7 (T elephone, E mail) 24x7 24x7 S atis faction guarantee, if not s atis fied Y es (100% up-time and 65 millis econds Tr…‰ vp rÃGr‰ ryÃ6 t…rr€r‡† with 90 days S print will pay up to $ 600 to Y es (99.95% up-time) delay) s witch back to previous provider D‡rt…h‡rqÃ7vyyvt Y es Y es Y es Thyr † Ã8uh  r y Uryrƒu‚r Y es Y es Y es Pyvr Y es No No P@Hà No No No Sr‡hvy No No No© Copyright 2000 Salestar Inc. All rights reserved© Copyright 2000 Salestar Inc. All rights reserved 12
  • 13. Broadband Competitive Intelligence Report Fixed Wireless X v T ‡h …à D ‡r t…h ‡r qà Ur y v t r  ‡Ã D ‡r t…h ‡r q à T ƒ…v ‡Ã D P Ià T r …‰ v pr † T r …‰ v pr †ÃQ…r€ v r…à Qhpx htr Q… ‚ q ˆ p‡ ÃUrp u‚y‚t’ A DS L , Integrated Acces s , A T M platform F ixed Wireles s F ixed Wireles s 128K bps , 256K bps 1 bps /8M bps M 128K bps , 384K bps Tƒrrqà Vƒ† ‡…rh€9‚ † ‡…rh€ 384K bps , 512K bps 684K bps /1M bps 768K bps , 1544K bps 1544K bps @HhvyÃ6 p p ‚ˆ‡† 5 7 50 DQÃ6 qq… r† † r† M ultiple s tatic IP ’s Unlimited (as long as they are jus tified) Unlimited (as long as they are jus tified) No (3 different pack ages available at an Tuh…rqÃXriÃC‚† ‡vtÃDp yˆqrq P ers onal Web page (6M B ) Y es additional cos t) 9‚€hvÃIh€rÃSrtv† ‡…h‡v‚ Y es Y es Q…v€h…’ Ã9IT Y es Y es Trp ‚qh… ’ Ã9IT Y es Y es 9h‡hÃT‡‚… htr 6M B 5M B 50M B 2-4 lines Unlimited local calling Call Waiting, caller ID, Call F orward, Voice G‚p hyÃW ‚vp rÃTr… ‰ vp rÃDp yˆqrq Y es (at an additional price) Y es mail, R otary H unt, Outgoing call res trict M ultiple phone numbers available 2 L ine plan either 1,000 minutes or 4,200 minutes per month 4 L ine plan either 4,200 minutes or 1 6,800 G‚tÃ9v† ‡hp rÃTr… ‰ vp rÃDp yˆqrq Y es (at an additional price) Y es (at an additional price) minutes per month 12 cents per minute beyond block of minutes included in plan W ‚vp r9h‡hÃ9v† p ‚ˆ‡ Included Y es (30% off from R B OC) Y es (30% off from R B OC) PyvrÃ6 p p ‚ˆ‡ÃHhhtr€r‡ Y es No Y es 8‚‡r‡ News group A cces s Office.com, News S erver A cces s No Q… vpr 2 L ine 4 L ine 1-Y ear 2-Y ear 3-Y ear 128K bps - $ 745, N ational-N on T erm: $ 292 $ 688 1 28K : $1 49 $139 $ 129 256K bps - $ 775 H‚‡uy’ ÃSrp ˆ……vtÃ8uh…tr N ational-1 to 3 Y r: $ 266 $ 625 384K : $ 249 $ 229 $ 209 384K bps - $ 81 0 M etro-N on T erm: $ 232 $ 436 768K : $ 449 $ 409 $ 379 512K bps - $ 895 M etro-1 to 3 Y r: $ 211 $ 396 1.54M B : $ 849 $ 779 $ 699 1544K bps - $ 1 20 ,1 T erm plan: $ 149 D† ‡hyyh‡v‚Ã8uh…tr $ 350 Included N on-term plan: $ 299 @„ˆvƒ€r‡Ã8uh… tr S print ION H ub included in M R C Included Included DTQÃ8uh…tr N o Charge No Charge No Charge Voice L ine $ 22.00 / L D bas ed on a $ 50, $ 500, $ 2500 minimum Intro Web H os ting $ 34.95/month 6 qqv‡v‚hyÃQ… vp vtÃ@yr€r‡† No S tarter Web H os ting $ 59.95/month Voice L ine $ 22.00 A dvanced Web H os ting $ 99.95/month All packages are s ubject to a one time s et- up fee of $ 39.95 8‚‡…hp ‡ 1, 2 or 3 Y ears 1 2, or 3 Y ears , 1, 2 or 3 Y ears 90 day cus tomer s atis faction policy. A fter Commitment level multiplied by the @h…y’ ÃUr… €vh‡v‚ÃArr that, cus tomer is liable for the remaining number of months in contract months in the contract 3 months free local s ervice when bundled $ 50 off ins tall charge for 1 year term 7 months free s ervice with 3 year term with L D and Data on a 1 Y r term and 5 free Q…‚€‚‡v‚† F R E E ins tall for 3 year term (limited time) months local s ervice on a 2 Y r. term when bundled with L D and Data Tr … ‰ vpr @„ˆvƒ€r‡ÃD† ‡hyyr… S print Wins tar T eligent P… qr…ÃD‡r… ‰ hy 45 Calendar Days 30-45 B us ines s Days 45 to 60 B us ines s Days Urp uvp hyÃTˆƒƒ‚…‡ 24x7 (T elephone, E mail) 24x7 24x7 S atis faction guarantee, if not s atis fied Tr…‰ vp rÃGr‰ ryÃ6 t…rr€r‡† with 90 days S print will pay up to $ 600 to N ot available Y es (on an individual cas e bas is ) s witch back to previous provider D‡rt…h‡rqÃ7vyyvt Y es Y es Y es Thyr † Ã8 u h  r y Uryrƒu‚r Y es Y es Y es Pyvr Y es Y es No P@Hà No No No Sr‡hvy No No No© Copyright 2000 Salestar Inc. All rights reserved© Copyright 2000 Salestar Inc. All rights reserved 13
  • 14. Broadband Competitive Intelligence ReportCompetitor Evaluation 3DUDPHWHUV 6:% %LUFK *DEULHO 3ULPDU 1HWZRUNV $OOHJLDQFH 3ULFH 6WUHQJWK 1HXWUDO 1HXWUDO 1HXWUDO 6WUHQJWK /HDG 7LPH 6WUHQJWK :HDNQHVV :HDNQHVV 6WUHQJWK :HDNQHVV 6HJPHQWDWLRQ 6WUHQJWK 6WUHQJWK :HDNQHVV 6WUHQJWK 1HXWUDO 9RLFHDWD :HDNQHVV :HDNQHVV 1HXWUDO :HDNQHVV 6WUHQJWK ,QWHJUDWLRQ RQWUDFW )OH[LELOLW 1HXWUDO 6WUHQJWK :HDNQHVV :HDNQHVV 1HXWUDO 6HUYLFHV :HDNQHVV 1HXWUDO :HDNQHVV :HDNQHVV 1HXWUDO 6DOHV LVWULEXWLRQ 1HXWUDO 1HXWUDO :HDNQHVV 6WUHQJWK :HDNQHVV 3URPRWLRQV :HDNQHVV :HDNQHVV 1HXWUDO :HDNQHVV :HDNQHVV 3DUDPHWHUV 4ZHVW ;2 ,QWHUPHGLD :LQVWDU 7HOLJHQW 3ULFH :HDNQHVV 1HXWUDO 6WUHQJWK 1HXWUDO :HDNQHVV /HDG 7LPH 1HXWUDO 1HXWUDO :HDNQHVV 1HXWUDO :HDNQHVV 6HJPHQWDWLRQ 6WUHQJWK 6WUHQJWK 6WUHQJWK 1HXWUDO 6WUHQJWK 9RLFHDWD 1HXWUDO 6WUHQJWK 6WUHQJWK 6WUHQJWK 6WUHQJWK ,QWHJUDWLRQ RQWUDFW )OH[LELOLW 1HXWUDO 1HXWUDO 1HXWUDO 1HXWUDO 1HXWUDO 6HUYLFHV 1HXWUDO 1HXWUDO 6WUHQJWK 6WUHQJWK 6WUHQJWK 6DOHV LVWULEXWLRQ :HDNQHVV :HDNQHVV :HDNQHVV 6WUHQJWK :HDNQHVV 3URPRWLRQV 1HXWUDO 6WUHQJWK :HDNQHVV 6WUHQJWK 6WUHQJWK SWB l Price: Pricing is nearly half of CLECs; self-installation further lowers installation cost l Lead Time: As the incumbent operator, offers the lowest order interval at 15 business days. Beats its competi tors by almost half l Segmentation: Widest range of speeds caters to the broadest range of consumer groups l Integration: Not offered at this time l Contract: No month-to-month terms. Only one year term available with a $200 early termination fee l Services: Virtually no services with the exception of disk space for a personal page l Sales: Telephone sales and on-line inquiry only. OEM channel with COMPAQ on their residential Basic package l Promotions: Moderate discounts for one of its package and none for the other© Copyright 2000 Salestar Inc. All rights reserved 14
  • 15. Broadband Competitive Intelligence Report Birch l Price: At twice the levels of comparable offerings, price is high even when the value of web hosting is factored in l Lead Time: With a high 45-60 calendar days turn around, Birch ranks as the highest among service providers l Segmentation: Offers a variety of web hosting packages and E-mail services l Integration: No integration neither on single pipe nor bundling l Contract: Month-to-month, one and two year terms available with a $250 early termination fee l Services: Substantial web hosting storage with scope for sophisticated design and enhancement l Sales: Telephone sales only l Promotions: None available at this time Gabriel Communications l Price: High even when equipment and installation charges are included l Lead Time: Similar to Birch, also Gabriel has a high service turn around l Segmentation: Average speeds and no web hosting services l Integration: Discounts available when bundling with three voice lines (minimum) l Contract: One, two and three year terms available with penalties for an early termination of contract l Services: Domain name registration but as a pass through charge to the customer l Sales: Telephone sales available l Promotions: Cost of CPE waived with a three year term and 50% off with a two year term Primary Networks l Prices: Several plan options with average prices. ADSL plans can achieve speeds up to 1.5MB and 6MB l Lead Time: With a 20 business days order interval, Primary Networks is closer to SWB l Segmentation: Competitive range of speeds tailored to target specific groups l Integration: No bundling and no single pipe access offered l Contract: One and three year term only. 60 day customer satisfaction policy, after that, customer is liable for the remaining months in the contract l Services: DNS and domain name registration services l Sales: Telephone and on-line sales available l Promotions: None offered at this time© Copyright 2000 Salestar Inc. All rights reserved 15
  • 16. Broadband Competitive Intelligence Report Allegiance l Price: Cheapest among integrated services providers l Lead Time: 60 calendar days for service, ranks Allegiance as one of the highest among service viders l Segmentation: Only web hosting is available with limited speed ranges l Integration: Fractional T-1 only. Voice is available but no bundling discounts l Contract: One, two and three year terms available. As a penalty for an early termination of contract, the cus- tomer has to return credit he received from Allegiance for purchase of Digital Trunk interface card l Services: Virtually no services besides web hosting storage l Sales: Telephone only l Promotions: None available at this time Qwest l Price: Highest price among providers, however, Qwest offers volume and term discounts ranging from 21% to 45% l Lead Time: Average lead time of 30 to 45 business days for service turn around l Segmentation: Broadest range of speeds and web hosting services. Web hosting services are being re-vamped l Integration: Fractional T-1 and long distance services offered l Contract: One, two and three year term with early termination fees l Services: Web hosting and e-mail services are not included but available at an additional cost l Sales: Telephone sales and on-line inquiry l Promotions: None available at this time XO Communications l Price: Twice as high as Allegiance and highest installation charge l Lead Time: 30 to 40 business days similar to Qwest l Segmentation: Wide choice of e-mail addresses and web hosting services l Integration: Fractional T-1 and discounts with voice bundling l Contract: 1 year term only and early termination penalties l Services: Sophisticated web hosting packages with high storage capacity l Sales: Telephone sales only, no OEM or retail l Promotions: Attractive incentives for new customers on their equipment and voice services© Copyright 2000 Salestar Inc. All rights reserved 16
  • 17. Broadband Competitive Intelligence Report Intermedia l Price: Very competitive prices and one of the lowest among providers l Lead Time: 60 to 75 calendar days for service installation. Highest between other providers l Segmentation: Wide range of speeds with voice and web hosting services l Integration: Voice is included but extra for web hosting services l Contract: One, two and three year term with applicable penalties for an early termination of contract l Services: Broad range of web hosting and e-commerce solutions; local and long distance services also offered l Sales: Only telephone channel is available l Promotions: None available at this time Winstar l Price: Competitive low prices on all four different speeds offered l Lead Time: Average lead time ranking equal to Intermedia and Qwest, XO l Segmentation: Voice services offered including local and long distance. Also offers three web hosting pack ages at affordable prices l Integration: Voice and data on single broadband access and discounts with bundling l Contract: Similar to Intermedia, after the customer satisfaction policy expires, customer is liable for remaining months in contract l Services: Rich web content through Office.com l Sales: Telephone and on-line sales available l Promotions: Seven months of free service with a three year commitment Teligent l Price: Higher by several multiples; high even after Web hosting installation and equipment charges factored in l Lead Time: 45 to 60 business days order interval on its service installation. One of the highest in the market l Segmentation: Attractive web hosting services with Premier package. A cheaper, but less robust Basic pack age is also available l Integration: Attractive bundling discounts with integrated services l Contract: Stiff penalties on early termination of contract. No month-to-month terms offered l Services: Sophisticated web hosting services with high storage capacity l Sales: Telephone sales available l Promotions: Three and five months of free service when signing a 1 or 2 year term. Also substantial discounts when bundling voice and data services© Copyright 2000 Salestar Inc. All rights reserved 17
  • 18. Broadband Competitive Intelligence Report About Salestar Salestar is the premier competitive information source for factual and unbiased information for the telecom- munications industry. Salestar provides competitive information databases, pricing and network design systems to the major telecommunications service providers in the US. Detailed information, gathered by over 65 telecommunica- tions research analysts, provide accurate and timely information on product and service offerings from the major US service providers and equipment manufacturers. In addition, Salestar’s Consulting Services group provides custom market specific competitive intelligence research on the competition, customized to your needs. Salestar’s research and consulting work is premised on the principle that the best competitive intelligence is developed through years of experience in research, analyzing and understanding telecommunication services, tech- nologies and policies guided by insightful intelligent strategies. Our established in-house staff of highly knowledge- able telecommunications technologies, services, and market research specialists allows us to offer customized com- petitive intelligence to assist telecommunications companies in becoming more effective in their sales and marketing efforts. Salestar’s services, systems and databases are your ultimate source for accurate and relevant competitive telecommunications information.© Copyright 2000 Salestar Inc. All rights reserved 18