New Edge Drops Wholesale

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

New Edge Drops Wholesale

New Edge Networks, an EarthLink company, cut their wholesale division this month. While volumes were good, especially with wholesale clients like Verizon, the margins were too thin for the NEN corporate strategy. That strategy would be to milk as much money as possible while this company remains afloat.

The new strategy is to double down on retail. Hire more channel managers and more direct sales people, so they can compete with each other on DSL sales. If you think I sound sarcastic, it's because even that strategy doesn't make much sense.

The stock (NASDAQ:ELNK) is doing well riding a high of over $8. But EarthLink's revenues are down. At the end of October, it reported a year over year revenue drop of 24%. Luckily, operating expenses dropped right along with the revenue.

"The company's total customer base fell from over three million at the end of September 2008 to 2.3 million a year later. Of these, 832,000 retail customers were contracted to broadband services at the end of Q309, down from 845,000 three months earlier." [Telegeography]


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