The Telecommunications Act of 1996 provided for significant deregulation
of the telecommunications industry, including the local telecommunications
and long distance industries. In a nutshell, this allowed for companies
such as Net2000 to prosper.
Net2000 is a rapidly growing provider of state-of-the-art broadband
telecommunications services. The company is an alternative to
traditional telephone companies, providing services to businesses located throughout
the mid-Atlantic and northeastern regions of the United States. These
solutions include an integrated package of high-speed data services,
Internet services, local and long distance services.
Net2000 began operating as a competitive telecommunications provider in
July 1998. Prior to that, they were a sales agent for Bell Atlantic.
Since their introduction in July 1998 they have successfully acquired
more than 1,100 new business customers representing approximately 78,000 access
lines.
As of December 31, 1999 their 13 Phase I markets represented a region
with more than 9 million business access lines. This region equates to
approximately 1/5th of the total United States business lines, according
to TeleCon, an independent telecommunications research firm. In Phase III
of their deployment, they plan to extend their network to include markets
encompassing approximately twenty of the business access lines in the
United States.
There are a couple of key areas that separate Net2000 from its big
brother competition. Net2000 offers all customers connected to their networks
low-cost dedicated access rates irrespective of calling volume. They
also provide billing for all of their services on a single invoice (wow, an
innovative concept in the telecom biz!).
Total revenues for Net2000 grew from $9.4 million in 1998 to $27.6
million in 1999. The two main segments of the telecommunications industry,
voice and data services, continue to drive growth. More important is
Net2000’s strong business and marketing plan, which will expand its market share
in the near future.
Net2000’s business strategy is simple, but effective: Offer more for
less cost to their customers. Expect the IPO do to quite well next week.
The price range on this IPO is $13-15 and the lead underwriter is
Goldman, Sachs & Co. The proposed ticker symbol is NTKK.
